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Unformatted text preview: Ecn 100  Intermediate Microeconomic Theory University of California  Davis April 21, 2009 Instructor: John Parman Midterm 1 You have until 4:30pm to complete this exam. Be certain to put your name, id number and section on both the exam and your scantron sheet and fill in test form A on the scantron. Answer all multiple choice questions on your scantron sheet. Choose the single best answer for each question; if you fill in multiple answers for a question you will be marked wrong. Answer the long answer questions directly on the exam. You must show your work for full credit. Answers may be left as fractions. Please place a box around final answers when appropriate. Good luck! Name: ID Number: Section: SECTION I: MULTIPLE CHOICE (60 points) 1. Jacks utility from chips (C) and salsa (S) is given by the function U(C,S). If U (4 , 2) = 10, U (2 , 4) = 10 and Jack has convex preferences, we can say that: (a) U (3 , 3) 10. (b) U (1 , 6) 10. (c) U (3 , 3) 10. (d) U (1 , 6) 10. 2. If bananas are an inferior, ordinary good, the the Engel curve for bananas is and the demand curve for bananas is . (a) Upward sloping, downward sloping. (b) Upward sloping, upward sloping. (c) Downward sloping, upward sloping. (d) Downward sloping, downward sloping. 3. Currently Jill is consuming positive amounts of books and magazines. At her current level of consumption, the marginal utility of a book is 4 utils and the marginal utility of a magazine is 3 utils. If the price of a magazine is $1 and the price of a book is $3, Jill can increase her utility by: (a) Buying more books and fewer magazines. (b) Buying more magazines and fewer books. (c) Buying fewer books and fewer magazines. (d) Not enough information. 4. Consider two utility functions U A ( x,y ) and U B ( x,y ). If U A ( x,y ) = U B ( x,y ), (a) The two utility functions will represent the same preferences. (b) An indifference curve for U A will have the same slope at any point ( x,y ) as an indifference curve for U B . (c) The marginal rate of substitution for U A ( x,y ) will be different than the marginal rate of substitution for U B ( x,y ). (d) None of the above. 2 Midterm 1 5. If we have a graph with apples on the horizontal axis and oranges on the vertical axis, an increase in the price of oranges will: (a) Make the budget line steeper. (b) Make the budget line flatter....
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This note was uploaded on 10/22/2010 for the course ECN 100 taught by Professor Parman during the Fall '08 term at UC Davis.
 Fall '08
 PARMAN

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