Quiz for ECO 3306 - Intermediate Microeconomic Analysis with North at Baylor (BU)

Quiz Information

Material Type:Quiz 2
Class:ECO 3306 - Intermediate Microeconomic Analysis
University:Baylor University
Term:Fall 2000
  • Preferences
  • Marginal Rate
  • Marginal Rate of Substitution
  • Substitution
  • Marginal Utility
  • Intermediate
  • Budget Line
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ECO 3306 Name: Fall 2000 Dr. Charles M. North QUIZ # 2 (Chapters 4 & 5) 1. Zeke has the utility function 22/1121 612),( xxxxu += . a. What type of preferences does this utility function represent? (2 point) b. Calculate Zeke’s marginal rate of substitution for any point ),( 21 xx . (3 points) c. What is the value of Zeke’s MRS at the point (25, 16)? (2 points) d. Explain what your answer in part (c) means in an economic sense. (2 points) e. Suppose that prices are 1$1 =p and 5$2 =p . Using these prices and Zeke’s utility function, write an equation that says that the slope of Zeke’s indifference curve is equal to the slope of his budget line at his optimal bundle. (3 points) f. Using the prices in part (e), calculate Zeke’s optimal bundle if his income is $250. (2 points) ECO 3306 – Fall 2000 – Quiz # 2 – Page 1 g. Calculate Zeke’s utility at his optimal bundle. (1 point) h. Write ...

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