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Unformatted text preview: M ICROECONOMICS P ROFESSOR V ASILIKI S KRETA S AMPLE M IDTERM Name + ID :__________________________________________ TAs Name: __________________________________________ Instructions: The use of class notes, textbooks is not permitted. Please write legibly; you will receive credit for the parts of your work that are Name + ID : TAs Name: Instructions: The use of class notes, textbooks is not permitted. Please write legibly; you will receive credit for the parts of your work that are legible. Read the questions carefully and provide concise but justified an- swers. SHOW ALL YOUR WORK. Good Luck! Part I:Short Answer Questions 1. Explain how we can account for bads (such as pollution) in analysis of consumer preferences. 2. Explain why utility maximization requires that a consumers budget is allocated so that the marginal utility per dollar of expenditure is the same for each good. 3. True or false, motivate. Nomis attaches a utility of 10 to microeconomics, whilst Naj attaches a level of 100. Will Naj be happier than Nomis if each of them takes microeconomics? 4. Explain what is meant by a corner solution? 5. Explain what is meant by a Giffen good? 6. True or false, motivate. The price elasticity of demand for Starbucks coffee is -1.24. Therefore, if the company raises price, consumer expenditures will also rise....
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This note was uploaded on 10/25/2010 for the course ECONOMICS C30.-0001- taught by Professor Bowmaker during the Fall '10 term at NYU.
- Fall '10