Economics 313
SAMPLE FINAL EXAMINATION
J. Wissink
Cornell University
Directions: Answer all questions. Write legibly, concisely, and coherently. Be sure to
label
all
axes, functions, and variables you use. READ QUESTIONS CAREFULLY.
Draw pictures whenever possible.
Total time for the test is 120 minutes.
The point score for each question is equal to
TWICE the amount of time allotted for the question. Maximum points available = 240.
Part I.
Short essay: 48 minutes, 12 minutes each; Answer all four.
Answer the question OR do the stated problem OR critically evaluate the following
statements and explain why
or in what way the statements are true, false, or uncertain.
1. Recall Abe and Betty and suppose: u
Abe
= min{2F, 1C} and u
Betty
= min{1F, 1C}.
Assume there is no production in this "economy" and that Abe and Betty each have 20
units of food and 10 units of clothing.
a. What allocations of food and clothing to Abe and Betty lie on the
contract curve? Illustrate on a carefully labeled Edgeworth box diagram.
b. Represent/transcribe the allocations on the contract curve in/into a
carefully
labeled and numbered utility possibility frontier (u.p.f.) diagram.
2. Prove that a profit maximizing simple monopolist would never choose to operate on
the inelastic portion of his/her demand curve.
3. Derive the longrun total cost function for widgets assuming that widgets are produced
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 Fall '07
 WISSINK
 Economics, Microeconomics

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