Define: Utility, indifference curve, MRS, convexity, Lagrange multiplier, demand function
Why are indifference curves convex?
Why cant indifference curves cross?
Why cant indifference curves slope upwards?
How do you know if an answer to a utility maximiz
Midterm Exam 2
AAEC 3315 Benson
Name _
Aug 3, 2012
This exam is divided into two sections. The first is a short-answer section of 6 questions.
The second section consists of three long-answer questions. The long answer section is
worth 60 points, with eac
Quiz 5 Solutions
AAEC 3315 Benson
Name _
Summer 2012
1. If production of widgets is determined by ( )
, and if k = 10, at what
value of is production maximized? At what level of is average product of labor maximized?
f is maximized where
(
)
.
Average pro
Quiz 4 Solutions
AAEC 3315 Benson
Name _
1.
If (
)
()
( ), Marshallian demand for x is
(compensated) demand for x is
Summer 2012
, and Hicksian
. If price of x starts at $2, and increases to $4,
identify the income and substitution effects on demand for
Quiz 4
AAEC 3315 Benson
Name _
1.
If (
)
()
( ), Marshallian demand for x is
(compensated) demand for x is
Summer 2012
, and Hicksian
. If price of x starts at $2, and increases to $4,
identify the income and substitution effects on demand for x.
2. For
Quiz 3 Solutions
AAEC 3315 Benson
Name _
1.
If (
)
()
Summer 2012
( ), show that the demand functions, x* and y*, are homogeneous of degree zero.
(
Demand is homogeneous of degree zero if
(
)
), for any t
Find x* by applying the 1st order condition from t
Quiz 3
AAEC 3315 Benson
Name _
1.
Summer 2012
)
()
If (
( ), show that the demand functions, x* and y*, are
homogeneous of degree zero.
2. Use the graph below to identify the income and substitution effects when price of x decreases
(moving the budget con
Quiz 2
AAEC 3315 Benson
Name _
1.
If (
that
)
()
()
( ), find x and y that maximize (
()
(
Summer 2012
) subject to the constraint
)
These two conditions imply that
Now, plug
solve for x
into the constraint, and
(
)
Now plug x = 2 into the constraint and
Quiz 2
AAEC 3315 Benson
Name _
1.
If (
that
)
()
( ), find x and y that maximize (
Summer 2012
) subject to the constraint
)
()
( ) If the consumer
2. Suppose a consumers utility function is (
consumes 1 unit of x and 4 units of y how many units of y woul
Name_
Quiz 1 Solutions
AAEC 3315 Benson
Summer 2012
1.
Suppose a firm chooses the quantity of a good to sell, Q. The market price for a chosen
quantity is
, and the firms costs of production are ( )
. What
quantity of output, Q maximizes profit? Hint:
(
T
Name_
Quiz 1
AAEC 3315 Benson
Summer 2012
1.
Suppose a firm chooses the quantity of a good to sell, Q. The market price for a chosen
quantity is
, and the firms costs of production are ( )
. What
quantity of output, Q maximizes profit? Hint:
2. Find x* th
AAEC 3315 Math Review Solutions
Y
Y = f(X)
X
Y
The graph should be positive (above
the x-axis) where f(x) is upward sloping. It should be negative (below
the x-axis) where f(x) is downward sloping.
X
1. Using the lower set of axes, graph the slope of the
AAEC 3315 Math Review
Y
Y = f(X)
X
Y
X
1. Using the lower set of axes, graph the slope of the above function.
a. How does the graph you drew relate to the function f(X) above?
b. Where is the inflection point of f(X)?
2. Solve the following equations for
Midterm Exam 1
AAEC 3315 Benson
Name _
July 24, 2012
This exam is divided into two sections. The first is a short-answer section of 6 questions.
The second section consists of three long-answer questions. The long answer section is
worth 60 points, with e