UCLA STATS 100C - Midterm1_Version1 (5 pages)

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Midterm1_Version1



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Midterm1_Version1

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Pages:
5
School:
University of California, Los Angeles
Course:
Stats 100c - Linear Models

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UCLA Economics 11 Fall 2016 Professor Mazzocco MIDTERM 1 Version 1 NAME ID TA Part I Multiple Choice Questions 3 5 points each 1 Suppose that an individual has a constant MRS of shoes for sneakers of 3 4 that is he or she is always willing to give up 3 pairs of sneakers to get 4 pairs of shoes Then if sneakers cost twice as much as shoes he or she will a buy only sneakers b buy only shoes c spend his or her income equally on sneakers and shoes d wear sneakers only 3 4 of the time 2 Bob spends his income buying tomatoes T and juices J The price of each pound of tomatoes is 8 dollars the price of each juice is 4 dollars His utility is given by U lnT lnJ What is the minimum income Bob needs to obtain a utility level equal to ln 8 a 40 b 32 c 64 d 100 1 3 An individual has a utility function for skis x and ski boots y of the form U x y min 2x y His or her indirect utility function is given by a V I px py b V 2px py I c V 2px py I d V 2I px 2py 4 If U X1 X2 X13 23X2 the MRS a depends on the values of X1 and X2 b depends only on the values of X1 c depends only on the values of X2 d is always constant 5 If U z r 4z 6r then the bundle 4 2 provides the same utility as a 4 3 b 3 2 c 2 5 3 d 3 5 1 6 If a function f x y is homogeneous of degree 3 then which of the following is true a f 2x 2y 9f x y b f 2x 2y 6f x y c f 2x 2y 8f x y d None of the above 7 What does the transitivity assumption on preferences imply a Indifference curves never cross b Indifference curves are convex c Indifference curves have diminishing M RS d All of the above 2 8 Suppose Peter s MRS of cake for tofu is 2 That is at the current consumption bundle he is willing to give up 2 pounds of tofu to get an extra piece of cake Suppose also that the price of a pound of tofu is 6 and a piece of cake is 3 Then in order to increase his utility Peter should a Buy more tofu and less cake b Buy more cake and less tofu c Continue with the current bundle d None of the above 9 An individual has a utility function for tennis rackets x and tennis balls y of the form U x y min x y She wants to achieve the utility level U Then her expenditure function is given by a E px py U px py U U b E px



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