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A quiz for students in eco 3306, a university-level economics course taught by dr. Charles m. North during the fall 2001 semester. The quiz covers material from chapters 2-6 and includes questions related to consumer preferences, marginal rate of substitution, and optimal bundles. Students are required to show their work and answer questions about utility functions, generalized demand functions, and optimal bundles for various price and income scenarios.
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ECO 3306 Name: Fall 2001 Dr. Charles M. North
QUIZ 1 (Chapters 2-6)
Answer the following questions in the space provided. SHOW ALL WORK!
a. (2 points) What is this consumer’s marginal rate of substitution at any point ( x 1 , x 2 )?
b. (6 points) Find the consumer’s generalized demand functions, and.
x 1 * ( p 1 , p 2 , m ) x 2 * ( p 1 , p 2 , m )
c. (1 point) What is the consumer’s optimal bundle if p 1 (^) = 6 , p 2 (^) = 3 , and m = 300?
d. (1 point) What is the consumer’s optimal bundle if , , and ?
p 1 (^) = 4 p 2 = 6 m = 480
e. (1 points) Give another utility function that represents the same preferences as this consumer.
f. (2 points) Show that the utility function you gave in part (e) yields the same marginal rate of substitution that you found in part (a).
a. (1 point) What type of preferences does this consumer have?
b. (3 points) What is the consumer’s optimal bundle if , , and ?
p 1 (^) = 2 p 2 = 2 m = 150
c. (3 points) What is the consumer’s optimal bundle if , , and ?
p 1 (^) = 4 p 2 = 2 m = 150