midterm_winter2009

midterm_winter2009 - Econ 51: Midterm February 9, 2009...

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Econ 51: Midterm February 9, 2009 Instructions: This is a closed book, closed-notes exam. You are allowed to use a hand-held calculator (i.e., no laptop). You have 110 minutes. Please answer all 3 questions. Please use a separate blue book for each question . Please write the name of your TA and section number (or section time) on each blue book. Note that throughout the midterm (and the class) log implies the natural logarithm. Always remember: think before you do the math ! Good luck! 1. Short questions (42 points) with probability 0.99, and pays nothing with probability 0.01. If you are su±ciently risk loving, you should buy the ticket. (3 points) True of false? (4 points) Explain using at most two sentences (third sentence and on will not be read). (b) (7 points total) You have a vNM utility function of v ( x ) = log( x ). You have income as experiment 1). You would pay $8 to participate in this lottery. (3 points) True of false? (4 points) Explain using at most two sentences (third sentence and on will not be read). (c) (6 points) There are four goods (
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midterm_winter2009 - Econ 51: Midterm February 9, 2009...

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