ECON 380
Sample Consumer Theory Exam Questions
The following are questions taken from some of my previous exams.
1.
Demonstrate that indifference curves cannot cross by appealing to the preference
axioms.
2.
If you know that Marshallian demand for
are
and
, respectively, can you calculate
Marshallian demand for
?
)
,
,
,
(
and
)
,
,
,
(
3
2
1
2
3
2
1
1
I
P
P
P
x
I
P
P
P
x
10
)
100
,
5
,
1
,
2
(
*
1
=
x
30
)
100
,
5
,
1
,
2
(
*
2
=
x
)
100
,
5
,
1
,
2
(
*
3
x
3.
A consequence of duality is that the expenditure function is the inverse of the indirect
utility function as was seen in the flow chart in the text and that was presented in
class.
If the indirect utility function is
5
.
5
.
2
)
,
,
(
y
x
y
x
P
P
I
I
P
P
V
=
:
a.
Calculate the expenditure function by solving for
I
.
b.
Given the expenditure function that you calculated in (a), use Shephard’s Lemma
to derive the Hicksian demand curve for good
x
.
c.
Are
x
and
y
are net substitutes or net complements?
Do you have to make any
assumptions in order to determine this?
4.
Hannah is my fiveyearold daughter whose utility function is
.
(Never mind what
are – you’ll find that out when you are the parent of a
fiveyearold.).
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 Spring '11
 Stevens

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