Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Problem Set 1 Solutions
1. Ch 1, Problem 1.2
Suppose the U.S. market for corn is competitive, with an upwardsloping supply
curve and a downwardsloping demand curve. For each of the following
scenarious, illustrate graphically how the exogenous event wil
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Problem Set 1
(Due Sept. 9th in class)
Chapter problems are from edition 5 of the textbook.
Questions from book are on the next page if needed
1. Ch 1, Problem 1.2
2. Ch 1, Problem 1.4
3. Ch 1, Problem 1.7
4. Ch 1, Problem 1.12
5. Suppose there are only t
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Problem Set 2
1. Graph a typical indifference curve for the following utility functions and determine
whether they obey the assumption of diminishing MRS:
a. U(x, y) = 3x + y
b. U(x, y) =
xy
c. U(x, y) =
x2 + y2
d. U(x, y) =
x2 y2
e. U(x, y) = x 2 / 3 y 1
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Problem Set 3 Questions
Due Sept 30th, 2014
Reminder:
Maximization question must be solved using method shown in class not
by using the tangency condition used in the text.
Note: this homework does not include questions on EV and CV, Ill
include some in t
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Problem Set 4 Questions
Adapted from Ch. 5, Problem 5.20
1.
Lous preferences over pizza (x) and other goods (y) are given by U(x, y) = xy. His
income is $120. You can use your calculations from HW 3 Problem 1 where you
found the demand function for this t
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Problem Set 3 Solutions
1. Aunt Joyce purchases two goods, perfume and lipstick. Her preferences are
represented by the utility function
U (P , L ) = PL ,
where P denotes the ounces of perfume used and L denotes the quantity of
lipsticks used. Let PP deno
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
INTERMEDIATE MICROECONOMIC THEORY I
DISTANCE STUDIES
Economics 2150A650
Department of Economics
Western University
COURSE OUTLINE
Instructor: Hiroaki Mori
Summer 2013
Office Room Number: SSC 4062
Office Phone Number: 5196612111 Ext. 85263
Email Addres
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Problem Set 4 Solutions
Ch, Problem 5 5.20
1.
Lous preferences over (x) and other goods (y) are given by U(x, y) = xy.
His income is $120. You can use your calculations from HW 3 Problem 1
where you found the demand function for this type of utility funct
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Problem Set 5
(Due Oct. 30th in class)
Reminder:
Maximization/Minimization question must be solved using method shown in class
not by using the tangency condition used in the text.
1. Ch. 7 problem 7.2: A grocery shop is owned by Mr. Moore and has the fol
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Problem Set 2 Solutions
1. Graph a typical indifference curve for the following utility functions and
determine whether they obey the assumption of diminishing MRS:
a. U(x, y) = 3x + y
y
3
Slope = 3
U =3
1
x
Since the indifference curves are not bowed to
Western University (Ontario)  Also known as University of Western Ontario
INTERMEDIATE MICROECONOMIC THEORY I
ECON 2650

Fall 2014
Math Review Questions
(Due Sept 4th in class  this is not for grades)
1. Find the derivate of the following cost functions with respect to q.
a)
c=
q3
(12 q)
b) c = q3 (12 ln q)
c) c = e q
2. Suppose that y is a function of x1 and x2, find the values of