pasttest6 - Multiple-Choice Section 15 questions Select the...

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. Multiple-Choice Section: 15 questions. Select the choice that best answers each question. Answers must be transferred to the scantron sheet. 1. If Jerry’s demand for good x is given by x J = 15 - 5 p , where p denotes the good’s price, what is Jerry’s marginal willingness to pay at x J = 5? (a) 0 (b) 1 (c) 2 (d) 3 (e) None of the above. C 2. Suppose Lan’s utility function is given by U ( x L ,y ) = 18 x - 2 x 2 + y . Her income is $1000 and the price of good y is 1. How many units of good x will Lan demand if its price is p = 2? (a) 1 (b) 2 (c) 3 (d) 4 (e) None of the above. D Inverse Demand p = 18 - 4 x Demand x = 9 / 2 - p/ 4 If p = 2, then x = 4. 3. How much is Jerry willing to pay for 2 units of the good? (a) 10 (b) 20 (c) 30 (d) 40 (e) None of the above. E 2 = 15-5p =¿ p=13/5=MWTP Choke-off Price: P=3 Thus WTP(2)=2(13/5)+(1/2)(3-13/5)(2)=26/5+2/5=28/5 4. How much more than Jerry is Lan willing to pay ( total ) for 2 units of the good?
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(a) 12 (b) 14 (c) 16 (d) 20 (e) None of the above. E wtp (2) = 18(2) - 2(2 2 ) = 36 - 8 = 28. Thus the amount is 28
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pasttest6 - Multiple-Choice Section 15 questions Select the...

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