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draft105mt - Economics 105 Intermediate Economics II...

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Economics 105 Intermediate Economics II Professor Peter Arcidiacono Midterm I February 11, 2004 Instructions : You have seventy-five minutes to complete the exam and there are seventy-five points on the exam. Make sure to get to all five questions. You must explain how you came to your answers to get full credit on any problem with the exception of problem 1. 1. a. U b. y x p p M + c. y x p U p d. x p M α e. U p p y x α α - 1 ( 1 0 < < α ) Which of the above expressions could possibly be a(n): Marshallian demand for x (3pts)? Marshallian demand for y (3pts)? Expenditure function (4pts)? Hicksian demand for x (3pts)? Hicksian demand for y (3pts)? Indirect utility function (4pts)? Note that more than one of the functions may be correct for one of the questions above. Full credit is given for getting all the correct answers.
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2. Dennis consumes hula hoops (x) and calculators (y). His utility function is given by: 2 4 y x U + = . Find Dennis’ Marshallian demands. Can either good be inferior? Sketch the indifference curve going through x=9, y=8 (15 pts)
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3.
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