10midterm - Midterm Examination EC2101 Microeconomic...

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Midterm Examination EC2101 Microeconomic Analysis (Semester I, 2011) General Instructions: This is a close-book examination. You have 90 minutes ( 2:00pm to 3:30pm ). Please check if you have a total of 2 pages. You may use calculators. I. Multiple Choice Question (There is only one correct answer). (5 points each). 1. If indifference curves cross, then: A) the assumption of a diminishing marginal rate of substitution is violated. B) the assumption of transitivity is violated. C) the assumption of completeness is violated. D) consumers minimize their satisfaction. E) all of the above 2. Please consider the following figure: The consumer chooses A on budget line I1 and B on budget line I2. Which of the following statements is NOT true? A) B is preferred to C. B) A is preferred to B. C) C is preferred to A. D) All of the statements are correct. 3. When a good is price inelastic, consumer expenditures on the good A) increase when price increases. B) decrease when price increases.
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10midterm - Midterm Examination EC2101 Microeconomic...

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