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Final2009Solution

# Final2009Solution - UCLA Economic 11 Fall 2009 Professor...

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UCLA Economic 11 Fall 2009 Professor Mazzocco Final Exam, Version 1 NAME: _______________________________________ID:____________________ TA:__________________________________________________________________ Part I) Multiple Choice Questions The next two questions refer to an individual whose utility function is given by U ( x, y ) = x + 3 y 1. With this utility function, the bundle (4, 1) provides the same utility as the bundle a. (1, 4). b. (2, 4). c. (1, 2). d. (2, 1). 2. For this utility function, the MRS ( y for x, i.e. dx dy ) 3. If utility is given by , min 2 ,5 U X Y X Y and P X = 2, P Y = 5, I = 60, this person will choose to consume 4. If utility is given by , 2 U X Y X Y and 1 Px Py , the indirect utility is given by

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b. 2 5. If the utility is given by 1 , U X Y X Y , the price elasticity and income elasticity of good X will be given, respectively, by a. 0, Px b. -1, 1. c. 2 I Px , Px . d. 0, 0. 6. If an individual buys only two goods and these must be used in a fixed relationship with one another (e.g., coffee and cream for a coffee drinker who never varies the amount of cream used in each cup), then 7. Suppose the production function for good q is given by 3 2 q k l where k and l are capital and labor inputs. Consider three statements about this function: I. The function exhibits constant returns to scale. II. The function exhibits diminishing marginal productivities to all inputs. III. The function has a constant rate of technical substitution. Which of these statements is true? 8. For the cost function .8 .4 .6 C q v w consider the following statements:
I. The function exhibits decreasing average cost. II. The function is homogeneous of degree 1 in v and w . III. The elasticity of marginal cost with respect to v exceeds the elasticity with respect to w. 9. If the demand faced by a firm is perfectly elastic, the marginal revenue of the firm will be equal to a. 1. b. 0. c. Infinity. d. None of the above.

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