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Quiz1 - IZMIR MICS TY OF EC Econ 201 Microeconomics Quiz 2...

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I Z M I R U N I V E R S I T Y O F E C O N O M I C S Econ 201 - Microeconomics Name: Quiz 2 - 26 Nov 2008 Student No: Assist. Prof. Efe Postalcı Answer the following 6 questions. You have 45 minutes. 1. Emily’s utility function is U ( x, y ) = 3 min { x, y } + y . If we draw her indiffer- ence curves with x on the horizontal axis and y on the vertical axis, these indifference curves are (a) made up of two line segments that meet where x = 4y. One of these line segments is vertical and the other has slope -1. (b) L-shaped with kinks where x = 4y. (c) L-shaped with kinks where x = y. (d) made up of two line segments that meet where x = y. One of these line segments is horizontal and the other has slope -3. (e) V-shaped with kinks where x = 3y. 2. Harry Mazzola has the utility function U ( x 1 , x 2 ) = min { x 1 + 2 x 2 , 2 x 1 + x 2 } . He has $40 to spend on corn chips and french fries. If the price of corn chips is $3 per unit and the price of french fries is $4, then Harry will (a) definitely spend all of his income on corn chips. (b) definitely spend all of his income on french fries. (c) consume at least as many corn chips as french fries but might consume both. (d) consume at least as many french fries as corn chips but might consume both. (e) consume equal amounts of french fries and corn chips.
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