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Unformatted text preview: ECO 310, Fall 2008 Midterm Examination October 23 Important instructions 1. This is a closed-book examination. Put away your books, handouts, notes, calculators, palmtops, cellular phones, ... now . 2. Print your name and your preceptors name clearly on the front cover of each answer booklet. Write your answers clearly. We wont grade unreadable answers. 3. Answer each question in a separate booklet . 4. Write and sign the honor pledgeI pledge my honor that I have not violated the honor code during this examination.on the front cover of your answer booklet. 5. The examination is for 75 minutes. It will end promptly . 1 Question 1 [50 points] 1. [40 points] There are two goods whose quantities are denoted by x and y and prices by p x and p y . A consumer has the following utility function U ( x,y ) = ( ( x- x )( y- y ) if x x and y y , otherwise , where x and y are minimal subsistence levels of goods x and y , respec- tively. She maximizes her utility subject to the budget constrainttively....
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This note was uploaded on 01/15/2011 for the course ECO 310 at Princeton.