Midterm Exam中级微观经济学考卷.doc

精品文档Midterm Exam Intermediate MicroeconomicsMay 24, 2013You have 1 hour and 40 minutes to solve the exam set. The whole exam set is worth 100 points:(1) Notice how many points each question is worth and allocate your time appropriately. (2) To get full credit on answers, you must be clear and rigorous: Define your variables, thoroughly label any graph, and interpret your graph or math in words. I. True-False (2 points each)1. If there are two goods and the prices of both goods rise, then the budget line must becomes steeper.2. If preferences are transitive, more is always preferred to less.3. With quasilinear preferences, the slope of indifference curves is constant along all rays through the origin.4. Charlies utility function is. His marginal rate of substitution between x and y does not change if you double the amount of both goods.5. It is possible to have decreasing marginal products for all inputs, and yet have increasing returns to scale.6. If a good is an inferior good, then an increase in its price will increase the demand for it.7. With quasilinear preferences, the equivalent variation and the compensating variation in income due to a tax are the same.8. Other things being equal, a lump sum tax is at least as good for a consumer as a quantity sales tax that collects the same revenue from him.9. If the average cost curve is U shaped, then the marginal cost curve must cross the average cost curve at the bottom of the U.10. If consumers spend all of their income, it is impossible for all goods to be inferior goods.11. If someone has the utility function U = 1000+2minx,y then x and y are perfect complements for that person.12. Michael has the utility function U(x; y) = maxx, y. Michaels preferences are convex.13. If the demand curve is a downward-sloping straight line, then the price elasticity of demand is constant all along the demand curve.14. If the marginal product of each factor decreases as the amount of that factor used increases, then there must be decreasing returns to scale.15. A firm faces competitive markets both for its inputs and its outputs. If its supply curve is q = 3p, then it can not have constant returns to scale.II. Multiple Choice (5 points each)1. Bob consumes goods x and y. Her indifference curves are described by the formula y =k/(x + 7). Higher values of k correspond to better indifference curves. Which of the following is true?(a) Bob likes good y and hates good x.(b) Bob prefers bundle (8, 9) to bundle (9, 8).(c) Bob prefers bundle (9, 5) to bundle (5, 9).(d) Bob likes good x and hates good y.(e) More than one of the above statements are true.2. Tim has preferences represented by the utility function: U(x; y) = min6x + y, x + 2y. If x is on the horizontal axis and y is on the vertical axis, what is the slope of his indifference curve at the point (8, 9)?(a) The slope is -6.(b) The slope is -2/6.(c) The slope is -1/2.(d) The slope is -1/6.(e) The slope is -8/9.3. Walt considers x and y to be perfect substitutes. They originally cost 10 and 9 respectively. His income is 720. One day the price of x drops to 8. Which of the following is true?(a) The income effect increases the quantity of y by 90.(b) The substitution effect increases the quantity of y by 80.(c) The substitution effect increases the quantity of x by 90.(d) The income effect increases the quantity of x by 80.(e) None of the above.4. A competitive, profit-maximizing firm uses two inputs a and b. Its production function is . Its output sells for $5 per unit. The price of input a is $1 per unit. If the price of output rises to $6 per unit but factor prices do not change,(a) it will increase its purchases of factor a by 11/4 units.(b) it will increase its purchases of factor a by 9/4 units.(c) it will increase its purchases of factor a by 3/4 units.(d) we would need to know the price of factor b to be able to determine the change in demand for a.(e) none of the above is true.5. Bernices preferences can be represented by the utility function:. She faces prices, (2, 1); and her income is 12. If prices change to (3, 1); then:(a) the compensating variation equals the equivalent variation.(b) the compensating variation is $2 greater than the equivalent variation.(c) the compensating variation is $2 smaller than the equivalent variation.(d) the compensating variation is $1 greater than the equivalent variation.(e) there is not enough information to determine which is larger.III. Essay1. Tom consumes A and B. His utility function is. The price of A is $1, the price of B is $2, and Toms income is $40 a day. The price of B suddenly falls to $1.(a, 5) Before the price change, how many A and B did Tom consume per day?(b,5) If, after the price change, Toms income had changed so that he could exactly afford his old consumption bundle, what would his new income have been? With this income and the new prices, how many A and B Tom would consume?(c, 5) Does the substitution effect of the fall in the price of B make him buy more B or fewer B? How many more or fewer? (d, 5) After the price change, how many A and B Tom actually buys ? (e, 5) Does the income effect of the fall in the price of B make him consume more B or fewer B? How many more or how many fewer?2. (10) If the prod