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Midterm-08

# Midterm-08 - ECN 712 Fall 2008 Professor Schlee Midterm...

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Unformatted text preview: ECN 712 Fall 2008 Professor Schlee Midterm Examination Instructions : Attempt all questions and write your answers in the blue books provided. There are 110 points on the exam, one for each minute of the exam period. Allocate your time carefully. Unless specified otherwise the consumption set is R L + , where L ≥ 2; all prices and wealth are positive; and all preference relations are continuous and strongly monotone. 1. (10 points) Let c ( q,w ) be a differentiable cost function for a single-output technology. True or False : “Since the cost function is homogenous of degree 1 in input prices w , the marginal cost function ∂c/∂q is homogenous of degree 0 in w .” Explain. 2. (30 points) For L = 2 let f be a C 1 function from all positive price-wealth pairs into R 2 + which satisfies budget balance and homogeneity of degree 0 in ( p,w ). For i,j = 1 , 2, let s ij = ∂f i ∂p j + f j ∂f i ∂w ....
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Midterm-08 - ECN 712 Fall 2008 Professor Schlee Midterm...

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