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Unformatted text preview: Economics 310-2 Spring 2009 Professor Jeff Ely Midterm Exam Instructions: There are three questions You have 90 minutes to complete the exam. Please remember that your explanations are at least as important as the answers you give. Explain your answers carefully. Also, please indicate on your bluebooks which discussion section you attend so that we can return your graded exam to you. 1. Suppose that a social welfare function satisfies Universal Domain, Pareto, and Inde- pendence of Irrelevant Alternatives. There are three individuals 1 , 2 and 3 and three alternatives A, B and C . When the agents preferences are as follows, Individual 1) A B C Individual 2) A C B Individual 3) B A C the social welfare function produces the social ranking B * A * C . What can you deduce about the social ranking produced for the following new list of preferences? Explain your answer carefully. Individual 1) C A B Individual 2) C A B Individual 3) C B A 2. There is a new social networking service, Fritter.Fritter....
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