Hw-1(budget, preference, utility)
1. If there are two goods with positive prices and the price of one good is reduced,
while income and other prices remain constant, then the size of the budget set is
reduced. F
2. If there are two goods, and if one good
HW-2(Optimal Choice, the Theory of Demand)
1. At a boundary optimum, a consumer's indifference curve must be tangent to her budget line.
(F)
2. Charlie's utility function is U(x; y) = xy2. His marginal rate of substitution between x and y
does not change
1
Questions for Review
x
x
x
x
x
x
The demand for a monopolists output is 7,000
divided by the square of the price in dollars that
it charges per unit. The firm has constant
marginal costs equal to 1 dollar per unit. To
maximize its profits, it should cha
Chapter 6
True-False
Topic: Demand
Correct Responses: 81
Correct Answer: True
Di culty: 1
Discrimination Index: 15
Demand
6.1 If preferences are quasilinear, then for very high incomes the income o er curve is a straight
line parallel to one of the axes.
2013/3/25
Questions for Review
Questions for Review
Janet consumes x1 and x2 together in fixed
proportions. She always consumes 2 units of x1
for every unit x2. One utility function that
describes her preferences is
a.
U(x1, x2) = 2x1x2.
2x
b.
U(x1, x2) =
1
Questions for Review
x
x
x
x
x
x
A competitive firm produces output using three
fixed factors and one variable factor. The firms
short-run production function is q = 524x - 4x2,
where x is the amount of variable factor used.
The price of the output is $
Questions for Review
x
x
x
x
x
x
If a firm moves from one point on a production
isoquant to another point on the same
isoquant, which of the following will certainly
not happen?
a. A change in the level of output
b. A change in the ratio in which the inpu
Chapter Eighteen
Technology
1
Technologies
A
technology is a process by which
inputs are converted to an output.
E.g. labor, a computer, a projector,
electricity, and software are being
combined to produce this lecture.
2
Technologies
Usually
several te
1
Questions for Review
x
x
x
x
x
x
A competitive firm uses two inputs, x and y.
Total output is the square root of x times the
square root of y. The price of x is $17 and the
price of y is $11. The company minimizes its
costs per unit of output and spends
Homework #4
u You
decide to purchase a new car for 18, 000.
Upon driving the car off of the lot, the resale
value of the car falls to 15, 000. After
purchasing the car, the 18, 000 represents ,
u Sunk cost?
1
Questions for Review
u The
marginal cost curve
- Cournot
- Price
1
Questions for Review
x
x
x
x
x
x
An industry has two firms. The inverse demand
function for this industry is p = 74 - 4q. Both
firms produce at a constant unit cost of $26 per
unit. What is the Cournot equilibrium price for
this indust
x
Advertisement
1
Questions for Review
x
A situation where everyone is playing a
dominant strategy must be a Nash equilibrium.
True
2
Questions for review
Anna, Bill and Charles are competitors in a local
market, and each is trying to decide if it is
wort
1
Questions for Review
x
x
x
x
x
x
A small economy has only two consumers, Nick
and Minnie. Nicks utility function is U(x, y) = x
+ 154y1/2. Minnies utility function is U(x, y) = x
+ 7y. At a Pareto optimal allocation in which
both individuals consume som
Midterm Exam
Time: Apr.22 (Monday), 15:20-17:00
Classroom: T5 (School of Economics)
1
Questions for Review
In a small Kansas town, there are two kinds of
gasoline consumers: 100 Buick owners and 50
Dodge owners. Each Buick owner has the demand
function Db
Midterm Exam
Time: Apr.22 (Monday), 15:20-17:00
Classroom: TBD
WeChat: FengLiu49
1
Questions for Review
Yorams
utility function is U(x, y) = 2x + 5y. The
price of x is $4 and the price of y is $15. Yoram
has $150 a week to spend on x and y. Yoram is
offe
Questions for Review
Harvey
Habit has a utility function U(c1, c2) =
mincfw_c1, c2, where c1 and c2 are his
consumption in periods 1 and 2 respectively.
Harvey earns $189 in period 1 and he will earn
$63 in period 2. Harvey can borrow or lend at an
inter
Chapter 2
Budget Constraint
True-False
Topic: Budget Constraint
Correct Responses: 90
Correct Answer: False
Di culty: 1
Discrimination Index: 10
2.1 If there are two goods with positive prices and the price of one good is reduced, while income
and other
Chapter 4
Utility
True-False
Topic: Utility
Correct Responses: 85
Correct Answer: False
Di culty: 2
Discrimination Index: 10
4.1 With quasilinear preferences, the slope of indi erence curves is constant along all rays through
the origin.
Topic: Utility
Chapter 5
Choice
True-False
Topic: Choice
Correct Responses: 78
Correct Answer: False
Di culty: 1
Discrimination Index: 21
5.1 At a boundary optimum, a consumer's indi erence curve must be tangent to her budget line.
Topic: Choice
Correct Responses: 56
Chapter 8
True-False
Topic: Slutsky Equation
Correct Responses: 86
Correct Answer: True
Slutsky Equation
Di culty: 1
Discrimination Index: 24
8.1 A Gi en good must be an inferior good.
Topic: Slutsky Equation
Correct Responses: 80
Correct Answer: False
Chapter 10
True-False
Topic: Intertemporal Choice Correct Responses: 71 Correct Answer: True
Intertemporal Choice
Di culty: 2 Discrimination Index: 40
10.1 An increase in the interest rate can not make a lender who satis es WARP become a
borrower.
Topic:
2013/3/11
Consumer Theory
Economists assume that consumers
choose the best bundle of goods they can
afford.
This chapter first specifies in detail what
chapter first specifies in detail what
consumer can afford: the budget constraint
or the consumption p
2013/3/18
Shapes of Budget Constraints Quantity Discounts
Questions for Review
If she spends her entire budget, Betsy can
afford 74 peaches and 9 pineapples. She
can also just afford 14 peaches and 21
pineapples. The price of peaches is 17
cents. What is
Questions for Review
Questions for Review
Nicks indifference curves are circles, all of
which are centered at (12, 12). Of any two
indifference circles, he would rather be on the
inner one than the outer one.
a.
Nicks preferences are not complete.
prefere
2013/3/28
Questions for Review
Convex
Weakly convex
Strictly convex
Diminishing MRS for strictly convex
indifference curves
Homework #1
Elmers utility function is U(x, y) = mincfw_x, y2. If
the price of x is $25 and the price of y is $15 and
if Elmer c
2013/4/1
Questions for Review
Questions for Review
For m > p2, the demand functions for goods 1
and 2 are given by the equations, x1 = m/p2 - 1
and x2 = p1/p2, where m is income and p1 and p2
are prices. Let the horizontal axis represent the
quantity of g
2013/4/8
Questions for Review
Questions for Review
Cindy consumes goods x and y. Her demand
for x is given by x(px, m) = 0.05m - 5.15px. Now
her income is $419, the price of x is $3, and the
price of y is $1. If the price of x rises to $4 and if
we denote