ch 3 Varian2 - ch 3 Varian Ch 3 In going through the...

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ch 3 Varian Ch 3 In going through the questions I noticed that some were repetitive and others were unclear. Avoid the highlighted questions Multiple Choice Identify the choice that best completes the statement or answers the question. ___ 1. Charlie’s indifference curves have the equation , where larger constants correspond to better indifference curves. Charlie strictly prefers the bundle (6, 15) to the bundle a. (15, 6). b. (7, 14). c. (11, 13). d. All of the above. e. None of the above. ___ 2. Ambrose has indifference curves with the equation , where larger constants correspond to higher indifference curves. If good 1 is drawn on the horizontal axis and good 2 on the vertical axis, what is the slope of Ambrose’s indifference curve when his consumption bundle is (1, 11)? a. b. c. –12 d. –2 e. –1 ____ 3. Nancy Lerner is taking a course from Professor Goodheart who will count only her best midterm grade and from Professor Stern who will count only her worst midterm grade. In one of her classes, Nancy has scores of 40 on her first midterm and 80 on her second midterm. When the first midterm score is measured on the horizontal axis and her second midterm score on the vertical, her indifference curve has a slope of zero at the point (40, 80). This class could a. be Professor Goodheart’s but could not be Professor Stern’s. b. not be either Professor Goodheart’s or Professor Stern’s. c. be either Professor Goodheart’s or Professor Stern’s. d. be Professor Stern’s but could not be Professor Goodheart’s. e. There is not enough information to tell whose class it could or couldn’t be. ___b_ 4. Nancy Lerner is taking a course from Professor Goodheart who will count only her best midterm grade and from Professor Stern who will count only her worst midterm grade. In one of her classes, Nancy has scores of 20 on her first midterm and 70 on her second midterm. When the first midterm score is measured on the horizontal axis and her second midterm score on the vertical, her indifference curve has a slope of zero at the point (20, 70). This class could a. be Professor Stern’s but could not be Professor Goodheart’s. b. be Professor Goodheart’s but could not be Professor Stern’s. c. not be either Professor Goodheart’s or Professor Stern’s. d. be either Professor Goodheart’s or Professor Stern’s. e. There is not enough information to tell whose class it could or couldn’t be.
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___ 5. If we graph Mary Granola’s indifference curves with avocados on the horizontal axis and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope of her indifference curve is –2. Whenever she has more avocados than grapefruits, the slope is . Mary would be indifferent between a bundle with 23 avocados and 29 grapefruits and another bundle with 31 avocados and a. 25 grapefruits. b.
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This note was uploaded on 05/08/2011 for the course ECON 302 taught by Professor Avrin-rad during the Spring '09 term at University of Illinois, Urbana Champaign.

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ch 3 Varian2 - ch 3 Varian Ch 3 In going through the...

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