Review%20problems%20for%20second%20midterm%20Fall%202009

Review%20problems%20for%20second%20midterm%20Fall%202009 -...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
REVIEW PROBLEM 1 Economics 102 Professor Blair Ms. Anthrope has a disposable income of $10 per week and spends it all on fish and bread. Currently the price of fish is $2 per pound and the price of bread is 50¢ per loaf. Her indifference curves are shown below. Fish Loaves 0 24 12 18 6 0 6 12 18 24 1. Draw her budget line in the diagram. What is the equation for this line?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2. Given her income and the prices of the two goods, how many pounds of fish and how many loaves of bread will she buy? 3. Why doesn’t she buy more of both goods? 4. Why doesn’t she buy more fish and less bread? 5. Using the indifference map, estimate the quantity of fish and bread Anthrope will purchase when the fish price is $2, $1, and 50¢. Draw a graph and plot these prices and quantities to show her demand curve for fish. lbs. $ / lb. 2.00 1.50 1.00 .50 0 4 8 12 16 20 24 28 0 6. If her income rises to $12 per week with the bread price remaining unchanged, how much fish will she now purchase when the fish price is $2, $1, and 50¢? Plot these price- consumption pairs on your graph for part 5.) What has happened to Anthrope’s demand for fish?
Background image of page 2
7. How much bread will Ms. Anthrope purchase when income is $12 per week? Will she necessarily increase her purchase of this product? EXPLAIN. 8. The realism of the behavior represented in these diagrams and the theory underlying them is often questioned. How would you redraw the indifference curve diagram, or reinterpret it, in each of the following cases? a . Having carefu lly
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
REVIEW PROBLEM 2 Economics 102 Professor Blair 1. Assume there are three techniques available to a steel making firm. Each uses capital and labor, but in different combinations.
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/08/2011 for the course ECON 220 taught by Professor Cai during the Spring '08 term at Rutgers.

Page1 / 10

Review%20problems%20for%20second%20midterm%20Fall%202009 -...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online