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!
1. A consumer has preferences represented by the utility function u.
2
2
2
121 ),( xxxx =
a. (2 points) What is this consumer’s marginal rate of substitution at any point
? ),( 21 xx
b. (6 points) Find the consumer’s generalized demand functions,
and .
),,(* 211 mppx
),,(* 212 mppx
c. (1 point) What is the consumer’s optimal bundle if , , and ?
6
1=
p3
2=
p300=m
d. (1 point) What is the consumer’s optimal bundle if , , and
?
4
1=p6
2=p
480=m
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).
