380 Exam 1 2010

380 Exam 1 2010 - Exam 1-Winter 2010 Economics 380 R. Pope

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Exam 1-Winter 2010 Economics 380 R. Pope Name________________________ Throughout, the notation is as we have used in class: U is a utility function, x and y are two goods with respective prices, p x and p y , and I is income. Show your work . Total= 140 points (listed beside each question). (5) 1. List and explain 3 main axioms that are used to obtain a utility function representation of preferences. (15) 2.a) Explain the meaning of the marginal rate of substitution (MRS). b) Does the utility function U(x,y)=y+6ln(x) have diminishing MRS (y on the vertical axis). c) Why does diminishing MRS hold special interest? a) b) c) (10) 3. John is in school. He has only 40 hours per week that he can divide between leisure and work. His job allows flexible hours and he is paid $9 per hour. Write his weekly budget constraint between leisure (x) and goods (y) in the form that economists prefer. (15) 4. Explain why the following utility functions represents or does not represent the same preference ordering:...
View Full Document

This note was uploaded on 04/07/2011 for the course ECON 380 taught by Professor Showalter,m during the Winter '08 term at BYU.

Page1 / 4

380 Exam 1 2010 - Exam 1-Winter 2010 Economics 380 R. Pope

This preview shows document pages 1 - 3. Sign up to view the full document.

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