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Econ 201  Microeconomics
Name:
Midterm  16 December 2008
Student No:
Assist. Prof. Efe Postalcı
Answer the following 3 multiple choice questions and 2 essay questions.
Show all your
calculations for the essay question. You have
100
minutes.
PART I: Multiple Choice Questions (each 10 points).
1. Will spends his entire income on 8 sacks of acorns and 8 crates of butternuts.
The
price of acorns is 9 dollars per sack and his income is 88 dollars. He can just afford a
commodity bundle with A sacks of acorns and B crates of butternuts that satisfies the
budget equation
(a) 9A + 4B = 88.
(b) 18A + 4B = 176.
(c) 11A + 2B = 88.
(d) 9A + 6B = 90.
(e) None of the above.
2. Hans has $27 which he decides to spend on x and y. Commodity x costs $16 per unit
and commodity y costs $10 per unit. He has the utility function
U
(
x, y
) = 5
x
2
+ 2
y
2
and
he can purchase fractional units of x and y. Hans will choose
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 Spring '10
 JOSEPHPETRY
 Economics, Supply And Demand, Utility, Economics curves

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