1. Find the MRS for each utility function given below:
a) U(x,y) = 3x+y
MRS = 3
b) U(x,y) = (x*y)
0.5
MRS = y/x
c) U(x,y) = (x)
0.5
+y
-0.5
MRS = 0.5x
-2 2 0.5
d) U(x,y) = (x y )
MRS = -y/x
2. Ms. Caffeine enjoys coffee (C) and tea (T) according to the fu
BC3035: Microeconomic Theory, Problem Set #5: Solutions
1. Jack Sprat can eat no fat, his wife can eat no lean. Construct an Edgeworth box
diagram for this pair (assuming fixed quantities of fat and lean) and indicate the
contract curve.
With fat on horiz
BC3035: Microeconomic Theory, Problem Set #7 solutions
Answer to problem 1:
Some additional hints:
This is a fixed coefficients production function. Function 1: uses ' k ' and 'l ' in the
ratio 2 : 1 . Function 2: uses ' k ' and 'l ' in the ratio 1 : 1 .
BC3035: Microeconomic Theory
Problem Set #4: solutions
1) David N. gets $3 per week as an allowance to spend any way he pleases. Because he
likes only peanut butter and jelly sandwiches, he spends the entire amount on peanut
butter (at $0.05 per ounce) an
Problem Set 6 - Solutions
1. From the table given below, compute the marginal product of labor. What can you
say about the shape of the marginal product curve?
Labor units
0
1
2
3
4
5
6
7 or more
Total Output
0
50
125
195
255
310
350
350
Marginal Product
Microeconomic Theory,
Barnard College
Problem Set #2_ Solution
1) Suppose low income people have preferences for non food consumption (NF) and food
consumption (F). In the absence of any income transfer programs, a persons budget
constraint is given by
NF
Solutions to Problem Set # 1
Microeconomic Theory
1)
Dependent
Variable
a.
y
b.
q
c.
x (or y)
d.
y
Independent
Variable
x
p
y (or x)
x (or none)
Intercept
Slope
3
-40
20 (or 10)
5
86
-2 (or -)
0
Graphs
1.a.
1.b.
q
y
slope=86
3
slope =
0
0
p
x
-40
1.c.
x