Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 3 - Consumer Theory
By: Lones Smith &
Jose Antonio Carrasco
1. Solutions
1. No. Is easy to check that is strictly increasing function of u and continuous in (p, u).
Nevertheless is not homogeneous of degree
Economics 711 Midterm Exam
October 2010
John Kennan
Time allowed: 75 minutes
Answer THREE questions. Each question has equal weight. Explain your answers carefully, using diagrams where appropriate. Write as if you are trying to convince an intelligent pe
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 3 - Consumer Theory
By: Lones Smith &
Jose Antonio Carrasco
1. Exercises
1. Is this ever a legitimate expenditure function given positive prices p = (p1 , ., pn ),
log E(p, u) = u + a +
n
X
i=1
1 X
ai log p
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 4 - Choice Under Uncertainty
By: Lones Smith &
Tono Carrasco
1. Exercises
1. Micro Problem Set - Exercise #100 (a) You are facing a risk that would either
double your wealth or cut it in half, with equal pr
Front Man: Lones Smith
lones@ssc.wisc.edu
On Drums: Tono Carrasco
Econ 711 Pace Runner Final
Thursday, October 24, 2013
120 points in 120 minutes.
Points are at the right. Rigorously justify everything with graphs or algebra. Enjoy!
% _=,_
%o_/6 /#\
%\_ |
Front Man: Lones Smith
lones@ssc.wisc.edu
On Drums: Tono Carrasco
Econ 711 Midterm
(Thursday, September 26, 2013 in Class)
Points are at the right. Rigorously justify everything with graphs or algebra. Enjoy!
1. Two brothers are arguing about an inheritan
Front Man: Lones Smith
lones@ssc.wisc.edu
On Drums: Jose Antonio Carrasco
Base Guitar: Eishiro Takeda
Econ 711 (1st half) Final
(79PM, Thursday, October 25, 2012)
120 points in 120 minutes. Rigorously justify everything with graphs or algebra.
1. The Firm
Front Man: Lones Smith
lones@ssc.wisc.edu
On Drums: Jose Antonio Carrasco
Base Guitar: Eishiro Takeda
Econ 711 Final
(79PM, Thursday, October 25, 2012)
120 points in 120 minutes. Rigorously justify everything with graphs or algebra.
1. The Firm finds that
Front Man: Lones Smith
lones@ssc.wisc.edu
On Drums: Jose Antonio Carrasco
Base Guitar: Eishiro Takeda
Econ 711 Midterm
(Thursday, September 27, 2012 in Class)
Points are at the right. Rigorously justify everything with graphs or algebra. Enjoy!
1. One can
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 4 - Choice Under Uncertainty
By: Lones Smith &
Tono Carrasco
1. Exercises
1. Micro Problem Set - Exercise #100 (a) You can have w2 with probability 12 or
. The expected
w with probability 12 . Therefore the
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 3 - Consumer Theory
By: Lones Smith &
Jose Antonio Carrasco
1. Exercises
1. For each case below, determine whether each X good is a Hicks Allen complement
or substitute for each Y good.
1/3 1/3
(a) U (X1 ,
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 3 - Consumer Theory
By: Lones Smith &
Tono Carrasco
1. Exercises
1. Suppose that wage income is taxed at rate t > 0. If the tax rate rises, what is the
condition on the labor supply elasticity that guarante
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 3 - Consumer Theory
By: Lones Smith &
Tono Carrasco
1. Solutions
1. (a) Let us use an analogue of two-stage budgeting technique for expenditure minimization problem. The problem of the decision make is
X
X
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 3 - Consumer Theory
By: Lones Smith &
Tono Carrasco
1. Exercises
1. From the utility maximization u(c, l), where c is consumption and l is leisure, with
respect to the budget constraint pc + w(1 )l = w(1 )T
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 1 - Monotone Comparative Statics
By: Lones Smith &
Tono Carrasco
1. Exercises
1. Prove that if A and B are compact subsets of R, then A B if and only if there exist
numbers a and b such that A = (A B) cfw_x
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 2 - Producer Theory
By: Lones Smith &
Tono Carrasco
1. Exercises
1. Michigan Prelim Fall 2001, Q5. Consider an industry in which, for each plant,
2
the total cost of producing output level q is given by C(q
Microeconomic Theory
Econ 711-UW-Madison
CHAPTER 2 - Producer Theory
By: Lones Smith &
Tono Carrasco
1. Solutions
1. Michigan Prelim Fall 2001, Q5. False. Let R(n, Q) be the revenue of the firm
2
with n plants and Q (total) output. We have R(n, Q) = (24Q)
Economics 711, Midterm Exam
November 16, 2010 (by Lones)
Do well! There are no trick questions, just solid economics.
Points in parentheses correspond to recommended minutes. . .
You must sign and return your copy of this exam.
No animals were harmed in w
Economics 711, Midterm Exam
November 16, 2010 (by Lones)
Do well! There are no trick questions, just solid economics.
Points in parentheses correspond to recommended minutes. . .
You must sign and return your copy of this exam.
No animals were harmed in w
Front Man: Lones Smith
lones@ssc.wisc.edu
On Drums: Jose Antonio Carrasco
Base Guitar: Eishiro Takeda
Econ 711 Midterm
(Thursday, September 27, 2012 in Class)
Points are at the right. Rigorously justify everything with graphs or algebra. Enjoy!
1. One can
Suggested Answers for 711 Midterm 2011
Fall 2011 ECON 711-I
Professor
TAs
:
:
John Kennan
Mike Batty / Jose Antonio Carrasco
Problem 1
(a) Notice that u(x) is increasing (becoming less negative) in each xl until xl = l . Because
PL
xl = l l is unaffordabl
D ecember 17, 2005, 3-5pm.
Economics 711: Final Exam
J ohn Kennan
Answer f our q uestions. Each question is worth 25 points, unless you say otherwise: you can reallocate points subject to the constraint
that each question is worth at least 20 (e.g. 40/20/
A monopoly airline sells tickets to business travelers (B ) and to leisure travellers (L). The proportion of B types is . There are two periods. At the
beginning of period one, the traveler privately learns his type, which determines
the probability distr
Q uestion n
S uppose t hat t here a re 50 million people i n t he l abor force in Mexico a nd 150 million in t he U.S. All workers prefer t o work in their own
country, b ut t he e xtent o f t his p reference varies across people. Assume t hat Mexican a n
University of Wisconsin
Microeconomics Prelim Exam
Friday, June 27, 2011: 9AM - 2PM
Questions and Solutions
There are four parts to the exam. All four parts have equal weight.
Answer all questions. No questions are optional.
Hand in 12 pages, written o
John Kennan
Microeconomics Questions
October, 2005
1. Suppose the market supply and demand curves for wheat are as follows (prices are in dollars, quantities in millions of
bushels):
PS = .02 QS , PD = 3 - .01 QD
The government is considering two possible
Economics 711 Midterm Exam
October 2009
John Kennan
Time allowed: 75 minutes
Answer THREE questions. Each question is worth 10 points, unless you say otherwise: you can reallocate points subject
to the constraint that each question is worth at least 8 (e.
There is a partial answer to parts a-c at
http:/www.ssc.wisc.edu/~jkennan/teaching/answerkeys/Selected%20(Partial)%20Answers.pdf
(question #51)
(This has been available to the students for a long time.)
The equilibrium with complete markets is pareto opti
1.
Suppose that crime is a profitable activity for some people, but not for others. A criminal
who is caught pays a penalty J, and a criminal who is not caught receives H. The probability
of being caught is F. The alternative to crime is a legal activity