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ReviewFinal

ReviewFinal - Aniko Oery University of California Berkeley...

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Unformatted text preview: Aniko Oery University of California, Berkeley Review Econ 100A, MICRO-ECONOMIC ANALYSIS, Spring 2010 In this review session we will focus on the older material, since we have discussed topics such as public goods and externalities in sections recently. However, as mentioned in the finalFAQ file, you should spend much more time reviewing part III of this class than the first two parts when preparing for the final. Due to time constraints, this review is not comprehensive. 1 Consumer Choice Multiple Choice Questions from old finals: 1. (Final 2005) Tom’s indifference curves indicate that he considers tea to be a perfect sub- stitute for coffee. Which of the following utility functions is an example of Toms preferences for tea and coffee where quantity of the two goods are represented by x and y, respectively? a) U ( x, y ) = 3 x + 5 y b) U ( x, y ) = min { x, y } c) U ( x, y ) = 8 x- 9 y d) U ( x, y ) = x y e) U ( x, y ) = (2 x + 3 y )2 2. (Final 2008) If a consumers preferences over baskets of two goods, x and y , are represented by a utility function having a marginal utility for x given by MU x = 2 y 3 x , then: a) The consumers marginal utility of x is diminishing as consumption of x increases. b) The consumers marginal utility of x is increasing as consumption of x increases. c) The consumer obeys diminishing marginal rate of substitution of x for y . d) The consumer violates diminishing marginal rate of substitution of x for y . e) The consumers indifference curve is not convex to the origin. 3. (Final 2008) In response to a decrease in the price of a good, the ”total effect” on the quantity consumed of that good will be larger if: a) The good has a smaller substitution effect. b) The good is normal rather than an inferior good. c) The goods Engel curve is downward sloping rather than upward sloping. d) All of the above. e) Both (a) and (b) but not (c). 4. (Final 2008) If a firm buys a building to use as office space for its workers, then the monthly opportunity cost of the building is best measured as: a) Zero. b) The amount the firm paid for the building divided evenly over the total number of months that it is usable....
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