practice1 - Econ3101 Section 006 Intermediate...

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Unformatted text preview: Econ3101 - Section 006 Intermediate Microeconomics Piotr Evdokimov * Department of Economics University of Minnesota. Midterm 1 will be on Wednesday, March 9, 2011. Practice Midterm 1. (note: this list of exercises is not exhaustive and it may be the case that I ask about topics not covered here but seen in class.) * Borrowed from Erick Sager with permission. 1 1 Review sheets You have two review sheets now: http://www.econ.umn.edu/~evdok003/3101review.pdf http://www.econ.umn.edu/~evdok003/3101review2.pdf USE THEM!!!!!!!!!!!!!!!!!!! 2 What’s not on this practice exam Revealed preference, market demand, elasticity, Slutsky equation (in terms of changes in demand and rates of change), and some other misc. topics USE YOUR HOMEWORKS, THE NOTES IN CLASS, AND THE REVIEW SHEET no. 2 TO STUDY THESE CONCEPTS. 3 Practice exam 1. Theory of Choice Consider a consumer who has the following utility function: u ( x,y ) = 3 x + 2 y (a) Draw the indifference curve through the bundle ( x ,y ) = (10 , 10), and indicate the direction of preferences. 5 10 15 20 25 5 10 15 20 25 2 (b) Do these preferences satisfy strict convexity? Justify your answer. You may use the above graph to illustrate your answer. (c) Do these preferences satisfy monotonicity? Justify your answer. 3 2. Consmuer Optimization and Demand A Consider a consumer who has the utility function: u ( x,y ) = 30 x 2 3 y 1 3 ....
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practice1 - Econ3101 Section 006 Intermediate...

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