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Quiz 1 for ECO 3306 - Fall 2001 by Dr. Charles M. North (Chapters 2-6) - Prof. Charles M. , Quizzes of Microeconomics

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.

Typology: Quizzes

Pre 2010

Uploaded on 08/19/2009

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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!
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).
pf2

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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!

  1. A consumer has preferences represented by the utility function u ( x 1 (^) , x 2 )= x 12 x 22.

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).

  1. A consumer has preferences represented by the utility function u ( x 1 (^) , x 2 )= 3 x 1 + 2 x 2.

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