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 ) a. depends on the values of x and y . b. is always 0. c. is always 3. d. is always 1/3. 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 a. (6,15 ). b. (30,0 ). c. (30,12 ). d. (15,6 ). 4. If utility is given by   ,2 U X Y X Y  and 1 Px Py , the indirect utility is given by a. I Px .

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b. 2 I Px Py c. 2 I Py d. 2 I Px Py . 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 a. there is no substitution effect from a change in the price of coffee. b. there is no income effect from a change in the price of coffee. c. Giffen's Paradox must occur if both coffee and cream are inferior goods. d. an increase in income will not affect cream purchases. 7. Suppose the production function for good q is given by 32 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? a. All of them b. None of them c. I and II but not III d. I and III but not II 8. For the cost function .8 .4 .6 C q vw 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. a. None is true. b. All are true. c. Only I is true. d. Only I and II are true. 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. 10. In the short run a perfectly competitive firm’s supply curve is given by its marginal cost curve. In order for this to be true, which of the following additional assumptions are necessary I. That the firm seeks to maximize profits. II. That the marginal cost curve be positively sloped. III. That price exceeds average variable cost. IV. That price exceeds average total cost.

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Final2009Solution - UCLA Economic 11 Fall 2009 Professor...

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