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Name
Final E xam
Please how y our w ork. C ircle y our f inal a nswer!
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1. M acDonald'sh asj ust i ntroduceda n ew h ealthym enu. T hey t ake a s urveyt o s ee
what type of customerswill order from this menu. They find that the probability
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Econ 480
Final exam
November 11th, 2010
Instructions:
This is a 90 minutes examination:
o There are 14 multiple-choice questions worth 3 points apiece.
o There is one numerical short-answer question worth points.
o There is one graphical short-answer ques
Econ 480
Midterm 2
November 11th, 2010
Instructions:
This is a 70 minutes examination:
o There are 10 multiple-choice questions worth 4.5 points apiece.
o There is one numerical short-answer question worth 20 points.
o There is one graphical short-answer
Chapter 2
1. What happens to the reservation wage if nonlabor income increases, and why?
2. What economic factors determine whether a person participates in the labor
force?
3. How does a typical worker decide how many hours to allocate to the labor
marke
Lecture Notes 1
Economics is based on an assumption that people have rational preferences. This
has three very simple rules. First, people care about final goods, and they are
inherently indifferent toward wealth and prices. A twenty-dollar bill does not
Lecture Notes 2
Given two sets X andY , a function is a rule that associates each member of X with
exactly one member ofY . Intuitively, y is a function of x means that the outcome y
depends on some x. For example, how happy you are might depend on how ma
Lecture Notes 3
Everything in economics is a constrained optimization problem. Remember the
definition you first heard in intro micro: economics is the study of the behavior of
individuals who satisfy their wants, given limited resources. Youd like to wat
Lecture Notes 4
The third technique involves the use of Lagrangians, which you may have
encountered if youve taken a multivariate calculus class. These are somewhat
technical and unintuitive, but easy once you get the hang of them. Dont worry if
you dont
Lecture Notes 5
Then if we estimate the equation,
Earnings = a + b ! Class + e
we would find that the average effect of the class is $875. This is accurate, but only for
the people who selected to take the class. It is not generally true of the population
Chapter 2
1. What happens to the reservation wage if nonlabor income increases, and why?
2. What economic factors determine whether a person participates in the labor
force?
3. How does a typical worker decide how many hours to allocate to the labor
marke
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NAME
Honor
Exam 2
Answereachquestion.@,evenifyoudomostoftheanSwerona
calculator you needto set up the problem and show me what you were using to get that
answer. Circle your final answer. The honor code is in affect.
l. T he d aily a mounto f i ce u s