ECON410MidtermPractice

ECON410MidtermPractice - Multiple Choice(4 points each 1 1...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Multiple Choice (4 points each) 1. Assume an individual has preferences of the form 1/4 1 2 1 2 , ) ln( ) ( U x x x x = + . Which of the following are his demand functions? A. 4/3 1/3 2 2 1 2 4 1 2 1 ; 4 4 ( ) ( ) p p I x x p p p = = - B. 4/3 1/3 1 1 2 4 1 1 2 2 ; 4 4 ( ) ( ) p p I x x p p p = = - C. 1/3 4/3 2 2 4 2 1 1 1 2 ; 4 4 ( ) ( ) p p I x x p p p = - = D. 1/3 4/3 1 4 1 2 1 1 2 2 4 4 ; ( ) ( ) p p I x x p p p = - =
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2. Assume a firm’s production technology is represented by the following isoquants. Which of the following statements is true?
Image of page 2
3. Some athletes insure their bodies to protect against the possibility of getting injured and not being able to make a living. Consider an athlete who, if healthy, will earn $100 million. If the athlete becomes injured, she will earn $0. This athlete has a vNM utility function of 1/2 ( ) u x x = , where x is money in millions of dollars (for instance, the individual’s vNM utility for $9 million is 3). What is the individual’s risk premium is she believes she will get hurt with 30% probability?
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern