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Practice Final

# Practice Final - Practice Final Exam ECON100A Solutions...

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Practice Final Exam ECON100A Solutions Will Not Be Posted Professor Michael Noel Family Name Given Name Student Number Instructions: Answer all questions . Closed book test. Non-programmable, non-graphing calculator permitted, but should not be necessary. No headphones permitted to be worn during the test. Regrade requests accepted only if the test is written in pen, not in pencil. Be conscious of the time remaining. Do the easiest problems first. Make sure you have enough time to attempt every question. Violations of academic honesty are taken very seriously, will result in an automatic F in the course, and the student will be turned over to the student’s Dean of Students for further repercussions. Please do not consider running afoul of the policy, and if you unclear about what constitutes a violation, please ask. Good luck!

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2 Question 1 Explain why the following statements are false. All points for the explanation. “If a normal good experiences a price change, the income and substitution effects of the price change work in the same direction, and the demand curve for that good necessarily slopes downward.” “If good 1 and good 2 are perfect substitutes for me, then I should only consume good 1 if the (absolute value of the ) MRS is larger than the (absolute value of the) MRT, and I should only consume good 2 if the opposite is true.”
3 “If the income effect of a price change for a particular good is zero, then the inverse Hicksian demand curve for that good is necessarily steeper than the inverse Marshallian demand curve for that good.” “Not all the goods Matthew consumes can be inferior goods for him since, as a mathematical fact, all his income elasticities of demand have to add up to zero. It is possible, however, that all the goods he consumes are necessities for him.”

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Practice Final - Practice Final Exam ECON100A Solutions...

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