PS 1 202 marking guide (Winter 2011)

PS 1 202 marking guide (Winter 2011) - PS 1 marking guide,...

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PS 1 marking guide, Econ 202 (Winter 2011) (1) 20 points total (a) 11 points total 3 points: knowing restriction #1—utility must be increasing as x increases 1 more point: knowing restriction #2—marginal utility must be decreasing as x increases 1 more point: understanding how to define marginal utility in context of problem (e.g., MU(2) = U(2) – 48) 1 more point: understanding/explaining underlying logic that U(2) and U(5) must lie above ‘midpoints’ 1 more point: understanding/explaining underlying logic that U(2) and U(5) must lie below level that would produce non-diminishing MU 2 more points: finding condition for U(2): 86 < U(2) < 96 2 more points: finding condition for U(5): 174 < U(5) < 180 (b) 6 points total 2 points: asserting general condition for utility-maximization (MUx/Px = MUy/Py) 2 more points: calculating MUx = 28 1 more point: substituting MUx, MUy, and Py into utility-maximization condition 1 more point: solving for Py = 6 (c) 3 points total 1 point: knowing general formula (P x x + P y y = I) for budget constraint 1 more point: substituting for Px, x, Py, y 1 more point: solving for I = 34 (2) 25 points total (a) 11 points total 1 point: understanding that additional egg costs $2 2 more points: understanding that $2 would by him 2/3 of a waffle
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PS 1 202 marking guide (Winter 2011) - PS 1 marking guide,...

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