Intermediate Microeconomic Analysis Signature:
(Econ 173)
Printed name:
Drake University, Spring 1997
William M. Boal ID number:
QUIZ #2: January 27, 1997
INSTRUCTIONS: This quiz is closed-book, closed-notes, but calculators are permitted. Only answers in
the boxes will be graded, so feel free to use margins and back for scratch work. Point values for each
question are noted in brackets. Maximum total points are 100.
(1) [budget constraint: 50 pts] Suppose income = $60, price of good #1 is $5, and price of good #2 is $6.
a. Give the equation for the budget line.
b. Compute the intercept on the axis for
good #1.
c. Compute the intercept on the axis for
good #2.
d. Compute the slope of the budget line,
with good #1 on the vertical axis and
good #2 on the horizontal axis.
e. Which of the following bundles (if
any) are affordable?
Bundle A: q1 = 5, q2 = 5.
Bundle B: q1 = 6, q2 = 6.
Bundle C: q1 = 5, q2 = 6.
