Exam 1 Homework Questions

Jane's utility function on bundles of two commotities (x,y) is given by: U(x,y)=4x2y3. What is the expression of MUxy(x,y)? a. x/y b. 2x/3y^3 c.2y/3x d.3x/2y

c. 2y/3x

Linda consumes two goods: x and y, has preferences that are smooth and maximizers are always interior, and income Y=$150. If px=$25 and py=$5, what is the marginal rate of substitution of good x for good y for Linda t her optimal bundle: a. -3 b. 7/2 c. 5 d. 1/2

c. 5

James consumes slices of pizza, denoted by x, and sodas, denoted by y. The prices are px=4 and py=2, respectively. Jame's income for the semester is $100. Consider the consumption bundle in which Jame buys 20 slices of pizza and 10 sodas. Is this bundle to the north-west of some bundle in Jame's budget constraint when we graph x in the horizontal axis? YES OR NO

YES

Vilfredo has complete and transitive preferences on cars. We know that he prefers Sonata to Mazda, and that Mazda is at least as good as Honda. Can we conclude he prefers Sonata to Honda? YES OR NO

YES

Mark has utility function U(x,y)=x3y. Then, the equation of Mark's indifference curve through (2,1) is: a. 3x/8y b. 8/x^3 c. 8/x d. 3xy

b. 8/x^3

The cost of producing 'n' pairs of shoes is C(n)=n^2. What is the equation of the line that is tangent to the cost function at n=3? a. C=3n+3 b. C= 3n+9 c. C=6n-9 d. C= 9n+3

c. 6n-9

The cost of producing n pairs of shoes is C(n)=n^2. What is the equation of the line tangent to the cost function at n=3? a. 3n+3 b. 9n+3 c. 6n-9 d.9n-3

c. 6n-9

If preferences on bundles of two commodities are complete, transitive, and satisfy more is better, then the indifference curve: a. are thick and upward slopping b. may be think lines that never cross c. are downward slopping thin curves that never cross d. are downward slopping but may cross

c. are downward slopping thin lines that never cross

When asked about her preferences between a and b, Lisa answered that a is NOT at least as good as b. If Lisa has complete preferences, then: a. lisa's preferences are not transitive b. lisa is indifferent between a and b c. lisa prefers b to a d. lisa prefers a to b

c. lisa prefers b to a

Roman loves corn bread. He buys corn meal and wheat flour in order to make corn bread. His recipe calls for 2 cups of corn meal and 1 cup of flour for each batch that he bakes. More corn bread is better for Roman. He can bake fractions of a batch, but has no use for corn meal or flour that is left over. What of the following is Roman's utility function on cups of corn meal, denoted by c, and cups of flour, denoted by f? a. U(c,f)=min{2c,f} b. 2c+3f c. min{c,2f} d. min{2c,3f}

c. min{c,2f}

Jane has complete and transitive preferences. Then: a. her MRT is always positive b. her preferences are linear c. she can rank any pair of alternatives d. if she prefers a to b and c to d then she prefers c to b

c. she can rank any pair of alternatives

What is the equation of the line that crosses through (0,10) and (10,9)? a. y=1+10x b.y=1+ (9/10)x c. y=10-x/10 d. y=1- (9/10)x

c. y=10-x/10

The amount of a commodity that a firm can produce efficiently is expressed by the equation F(L,K)=4L^2K^3. What is the partial derivative of F with respect to L? a. dF/dL(L,K)= 4LK^3 b.dF/dL(L,K)= 12L^2K^2 c.dF/dL(L,K)=8LK^3 d.dF/dL(L,K)=8L^2K^3

c..dF/dL(L,K)= 8LK^3

Consider the function F given by the following expression F(n,k)=2n+k where n and k are real numbers. Which of the following pairs belongs to the iso level set as (1,3)? a. (5,0) b. (5,5) c. (0,3) d. (0,5)

d. (0,5)

Jane has preferences that are represented by the utility function U(x,y)=x2y3 (this preference is smooth, which implies that maximizers are interior). If she has income Y=$1000, px=$50, and py=$25, what is her preferred consumption bundle? a. (12,16) b. (14,12) c.(3,34) d.(8,24)

d. (8,24)

Consider the utility function U(x,y)=2x+3y. The marginal rate of substitution of good x for good y (at some pair (x,y)) is given by: a.2 b.3 c.3/2 d. 2/3

d. 2/3

Alexandra is maximizing her utility over goods x and y subject to her budget constraint. Her preferences are smooth (maximizers are always interior). At her optimal consumption bundle, her MRS of goof y for good x is equal to 1. The price of good x is $4. What is the price of good y? a. 3 b.2 c.1 d.4

d. 4

The number of slices of pizza a student buys during a semester depends on the student's a=income, the price of the slices, and the price of all other products that the student can buy. The number of slices a student buys is a function of how many variables? a. 0 b. 1 c. impossible to determine d. n+1 where n is the number of products that the student can buy (including pizza)

d. n+1

A marketing firm is interested in eliciting Silvias tastes on a set of ten automobiles. In order to do this they ask Silvia, for each pair of alternatives (x,y) whether she finds x at least as good as y. Silvia's is interested in both reliability and safety. She looks at the ratings of both and constructs a combined index by taking the average of the rating. She answers that an alternative x is at least as good as y if and only if the average index of x is greater that of equal to the average index of y. a. may violate completeness b. may violate transitivity c. have a cycle d. necessarily satisfy completeness

d. necessarily satisfy completeness

Linda receives a raise at work and her income increases. How does her budget line change? a. flatter b. steeper c. doesn't change d. it makes a parallel shift outward

d. shifts outward

Linda's utility function is given by U(x,y)=2x+y. Then Linda's indifference curves are: a. vertical lines b. L shaped c. straight upward slopping lines d. straight downward slopping lines

d. straight downward slopping lines

Adam has complete and transitive preferences on cars. We know that he finds Sonatas at least as good as Mazdas, and that a Mazda is at least as good as a Civic. Can we conclude that he prefers Sonatas to a Civic? YES OR NO

no

Leon has complete and transitive preferences on greek sweets. He finds a piece of Bougatsa is at least as good as Melomakarona, and he prefers Melomakarona to Halva. Can the utility of Halva be greater than Bougatsa? YES OR NO

NO

Otis consumes two goods: x and y. If the price of x is $2 and the price of y is $5, then the marginal rate of transformation of y into x is: a. -2/5 b.1/4 c. 2/5 d.-1/4

a. -2/5

Linda consumes two goods: x and y, has preferences that are smooth and maximizers are always interior, and income Y=$150. If px=$25 and py=$5, what is the marginal rate of transformation of y into x (MRTxy) at her optimal bundle? a. -5 b. -3 c. -1/2 d. 7/2

a. -5

Jane's utility function on bundles of two commotities (x,y) is given by: U(x,y)=4x2y3. a. 1/3What is the value of MUxy(x,y) when x=2 and y=1? b. 2 c. 2/3 d. 3

a. 1/3

Jane's utility function on bundles of two commotities (x,y) is given by: U(x,y)=4x2y3. What is the value of MUxy(x,y) when x=2 and y=1? a. 1/3 b. 3 c. 2/3 d. 2

a. 1/3

Jane's utility function on bundles of two commotities (x,y) is given by: U(x,y)=4x2y3. What is the expression of MUy(x,y)? a.12x^2y^2 b. 4xy^3 c. 8x^2y^3 d.8x^3y^3

a. 12x^2y^3

Consider the utility function U(x,y)=2x+3y. The marginal utility of good x is given by: a. 2 b. 1/3 c. 3 d. 3/2

a. 2

The cost of producing 'n' pairs of shoes is C(n)=n^2. What is the derivative of the cost function when n=3? a. 6 b. 4 c.7 d. 5

a. 6

Jane's utility function on bundles of two commotities (x,y) is given by: U(x,y)=4x2y3. What is the expression of MUx(x,y)? a. 8xy^3 b. 4xy^4 c. 8x^2y^3 d. 12x^2y^2

a. 8xy^3

Catherine has complete and transitive preferences on three alternatives a, b, and c. We know that for her: a is not at least as good as b and b is not at least as good as c. Then we know that for Catherine: a. c is preferred to a b. b is indifferent to c c. a is preferred to c d. b is preferred to c

a. c is preferred to a

The manager of the local branch of a bank in College Station is offered a transfer to Austin. This person is guaranteed a salary that is able to buy the goods and services that he/she was consuming in College Station. Assume that the welfare of this agent depends only on her consumption, and that the goods in College Station and Austin are comparable. Then, the manager: a. can only be better off with the transfer but not worse b. will be better off and worse off at the same time c. depends on the marginal rate of substitution whether the manager is worse off or not d. can be either better or worse off

a. can only be better with the transfer but not worse

Phillip's utility function is given by U(x,y)=min{x,2y}. Then his indifference curves are: a. l shaped b. vertical lines c. horizontal lines d. smooth curves

a. l shaped

A marketing firm is interested in eliciting Silvias tastes on a set of ten automobiles. In order to do this they ask Silvia, for each pair of alternatives (x,y) whether she finds x at least as good as y. Silvia's is interested in both reliability and safety. She answers that x is at least as good as y if and only if x is at least as reliable as y and x has at least the safety ranking as y then: a. may violate completeness b. necessarily satisfy completeness c. will have a cycle d. violate completeness

a. may violate completeness

A marketing firm is interested in learning about millennial' preferences on learning experiences.... Suppose that a student answers are as follows: one arrow from traditional to online class, one arrow from traditional to flipped course, and one arrow from online to flipped. a. the student statements satisfy completeness and transitivity b. violate transitivity but are complete c. violate completeness but are transitive d. violate transitivity and completeness

a. the students statements satisfy completeness and transitivity

Suppose that the depreciation of a car, which is measure in dollar, is determined by the miles it is driven and its age. Which of the following expressions may represent the depreciation of a car if depreciation increases with both miles driven and age? (d=dep, m=miles, a=age) a. D(m,a)=0.1m+100a b. D(m)= 2m c. D(m,a)=100a-0.1m d. D(a)=100a

a.D(m,a)=0.1m+100a

The cost of producing 'n' units of output in a certain factory is given by the expression C(n)=2n+n^2. The the expression of the derivative of the average C is? a. 2 b. 1 c. 2+2x d.3x

b. 1

Suppose that the cost of producing 'n' pairs of shoes is given by the expression C(n)=30+5n. The average cost of producing a pair of shoes is given by A(n)=C(n)/n. What is the amount for n for which the average cost is 8? a. 5 b. 10 c. 8 d. 35

b. 10

Jane's utility function on bundles of two commotities (x,y) is given by: U(x,y)=4x2y3. What is the value of MUx(x,y) when x=1 and y=2? a. 128 b. 64 c. 32 d.48

b. 64

A preference is complete if: a. Between any two alternatives a and b, a is indifferent to b b. Between any two alternatives a and b, at least one of the following holds: a is at least as good as b, or b is at least as good as a. c. Between two alternatives a and b, if a has more of each commodity then a is preferred to b d. between any two alternatives a and b, if a is preferred to b then b is preferred to a

b. Between any two alternatives a and b, at least one of the following holds: a is at least as good as b, or b is at least as good as a.

Consider the function F given by the following expression: F(n,k)=min{2n,k} where n and k are real numbers. Draw the iso-level set of F(n,k)=2. The iso-level set looks like: a. a straight line b. an L shaped c. an X shape d. a bell shaped curve

b. an L shape

Consider the function F given by the following expression F(n,k)=min{2n,k} where n and k are number. Draw the iso level set of F(n,k)=2. The iso level set looks like: a. a straight line b. an L shaped c. a bell shaped curve d. half a circle

b. an L shaped

Suppose that initially the prices of x and y are the same. If the price of good x doubles and the price of good y triples, while income is held constant, the budget line: a. becomes flatter b. becomes steeper c. does not change d. shifts inward

b. becomes steeper

Victor is the manager of a local bank branch in College Station where he consumes bundles of two commodities x and y. Prices in College Station are px=1 and py=5. He is offered a transfer to Dallas where prices are px=2 and py=8; Victor is guaranteed a salary in Dallas with which he would be able to buy exactly what he buys in College Station. Victor's utility function is U(x,y)=xy and his income in College Station is $5000. What happens to Victor's utility if he accepts the change (Victor's utility maximization is always characterized by the tangency rule)? a. increases 1.5% b. increases 1.25% c. decreases by 1% d. increases by 1.75%

b. increases by 1.25%

A decreasing MRS of x for y means: a. it has no behavioral meaning b. it is more and more difficult to substitute x for y as the consumption of x gets higher c. the tangent to an indifference curve is flatter as x decreases d. it is more easy to use y as a substitute for x as the consumption of y increases

b. it is more and more difficult to substitute x for y as the consumption of x gets higer

Jane prefers a to b, b to c, and c to a. Based on this information, what properties are violated by Jane's preferences (only one answer is correct)? a. completeness b. transitivity c. more is better d. completeness and transitivity

b. transitivity

Chuck's utility function on the number of cookies he eats, denoted by c, and the number of glasses of milk he drinks, denoted by m, is given by: U(c,m)=min{2c,m3}. What is the point that is most to the south-west in Chuck's indifference curve that passes through (2,8)? a. (5,5) b.(4/3,8) c. (2, 4/3) d.(8,8)

c. (2,4/3)

The amount of a commodity that a firm produce efficiently is a function of the number of hours of labor employed, L, and the stock of capital, K, and is given by the expression F(L,K)=4L^2K^3. Consider the pair (L,K)=(4,1) Which of the following vectors belong to the iso-level set of F that passes through (4,1)? a. (3^(1/2),3) b. (1,4) c.(2^(1/2),2) d.(3^(1/2),2)

c. (2^(1/2),2)

Juno has preferences that are represented by the utility function U(x,y)=x1/2y1/2 (this preference is smooth, which implies that maximizers are interior). If Juno has income Y=$1000 and px=$50 and py=$25, what is Juno's consumption of good x (assuming Juno maximizes her utility given her budget constraint?) a. 20 units b. 25 units c. 10 units d. 50 units

c. 10 units

Consider the function F given by the following expression F(n,k)=min{2n,k} where n and k are number. What is F(10,2)? a. 4 b. 20 c. 2 d. 10

c. 2

What is the solution for y of the following system of equations: X^2/y^2=9 and x+y=100 a.15 b.30 c. 25 d.75

c. 25

Suppose the price of good x is $10, the price of good y is $15, and Katrina's income is $30. What is the equation of Katrina's budget constraint? a. 3x+2y=6 b. 15x+10y=30 c. 2x+3y=6 d. 3x+2y=12

c. 2x+3y=6