Exam 30: Exchange-Part A

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A small economy has only two consumers, Zeke and Maude.Zeke's utility function is U(x, y)= x + 48y^1/2.Maude's utility function is U(x, y)= x + 4y.At a Pareto optimal allocation in which both individuals consume some of each good, how much y does Zeke consume?

(Multiple Choice)

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Question 61

Partial equilibrium analysis concerns only supply or only demand while general equilibrium analysis deals with supply and demand at the same time.

(True/False)

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Question 62

Professor Nightsoils utility function is U N (B N, P N)= B_N + 4P^1/2_N and Dean Interfaces utility function is U I (B I, P I)= B_I + 2P^1/2_I, where B N and B I are the number of bromides and P N and P I are the number of platitudes consumed by Nightsoil and Interface respectively.If Nightsoils initial endowment is 4 bromides and 10 platitudes and if Interfaces initial endowment is 3 bromides and 15 platitudes, then at any Pareto efficient allocation in which both consume positive amounts of both goods,

(Multiple Choice)

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Question 63

Professor Nightsoils utility function is U N (B N, P N)= B_N + 4P^1/2_N and Dean Interfaces utility function is U I (B I, P I)= B_I +2P^1/2_I where B N and B I are the number of bromides and P N and P I are the number of platitudes consumed by Nightsoil and Interface respectively.If Nightsoils initial endowment is 4 bromides and 25 platitudes and if Interfaces initial endowment is 2 bromides and 20 platitudes, then at any Pareto efficient allocation in which both consume positive amounts of both goods,

(Multiple Choice)

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Question 64

Irene and Orville live in an isolated valley and trade with no one but each other.They consume only cantaloupes and grapefruits.Irene has an initial endowment of 5 cantaloupes and 12 grapefruits.Orville has an initial endowment of 19 cantaloupes and 25 grapefruits.For Irene, the two goods are perfect substitutes, one for one.For Orville, they are perfect complements, one for one.At all Pareto efficient allocations,

(Multiple Choice)

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Question 65

A pure exchange economy is an economy where goods are traded but there is no production.

(True/False)

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Question 66

Colette and Boris both consume the same goods in a pure exchange economy.Colette is originally endowed with 9 units of good 1 and 6 units of good 2.Boris is originally endowed with 18 units of good 1 and 3 units of good 2.They both have the utility function U(x₁, x₂)= x^1/3₁x^2/3₂.If we let good 1 be the numeraire, so that p₁ = $1, then what will be the equilibrium price of good 2?

(Multiple Choice)

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Question 67

An economy has two people, Charlie and Doris.There are two goods, apples and bananas.Charlie has an initial endowment of 3 apples and 10 bananas.Doris has an initial endowment of 6 apples and 5 bananas.Charlie's utility function is U(A C, B C)= A C B C, where A C is his apple consumption and B C is his banana consumption.Doris's utility function is U(A D, B D)= A D B D, where A D and B D are her apple and banana consumptions.At every Pareto optimal allocation,

(Multiple Choice)

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Question 68

A situation is Pareto efficient if

(Multiple Choice)

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Question 69

Teresa and Jean-Pierre both consume the same goods in a pure exchange economy.Teresa is originally endowed with 9 units of good 1 and 6 units of good 2.Jean-Pierre is originally endowed with 91 units of good 1 and 14 units of good 2.They both have the utility function U(x₁, x₂)= x^1/3₁x^2/3₂.If we let good 1 be the numeraire, so that p₁ = $1, then what will be the equilibrium price of good 2?

(Multiple Choice)

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Question 70

Morris has the utility function U(b, w)= 4b + 16w and Philip has the utility function U(b, w)= bw, where b is the number of books consumed per month and w is bottles of wine consumed per month.If we draw an Edgeworth box with books on the horizontal axis and wine on the vertical axis and if we measure Morris's consumptions from the lower left corner of the box, then the contract curve contains

(Multiple Choice)

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Question 71

Marilyn and Chen live in an isolated valley and trade with no one but each other.They consume only bananas and tomatoes.Marilyn has an initial endowment of 4 bananas and 11 tomatoes.Chen has an initial endowment of 20 bananas and 27 tomatoes.For Marilyn, the two goods are perfect substitutes, one for one.For Chen, they are perfect complements, one for one.At all Pareto efficient allocations,

(Multiple Choice)

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Question 72

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Exam 30: Exchange-Part A

A small economy has only two consumers, Zeke and Maude.Zeke's utility function is U(x, y)= x + 48y1/2.Maude's utility function is U(x, y)= x + 4y.At a Pareto optimal allocation in which both individuals consume some of each good, how much y does Zeke consume?

Partial equilibrium analysis concerns only supply or only demand while general equilibrium analysis deals with supply and demand at the same time.

A pure exchange economy is an economy where goods are traded but there is no production.

A situation is Pareto efficient if

Budget Constraint-Part A

Budget Constraint-Part B

Preferences-Part A

Preferences-Part B

Utility-Part A

Utility-Part B

Choice-Part A

Choice-Part B

Demand-Part A

Demand-Part B

Revealed Preference-Part A

Revealed Preference-Part B

Slutsky Equation-Part A

Slutsky Equation-Part B

Buying and Selling-Part A

Buying and Selling-Part B

Intertemporal Choice-Part A

Intertemporal Choice-Part B

Asset Markets-Part A

Asset Markets-Part B

Uncertainty-Part A

Uncertainty-Part B

Risky Assets-Part A

Risky Assets-Part B

Consumers Surplus-Part A

Consumers Surplus-Part B

Market Demand-Part A

Market Demand-Part B

Equilibrium-Part A

Equilibrium-Part B

Auctions-Part A

Auctions-Part B

Technology-Part A

Technology-Part B

Profit Maximization-Part A

Profit Maximization-Part B

Cost Minimization-Part A

Cost Minimization-Part B

Cost Curves-Part A

Cost Curves-Part B

Firm Supply-Part A

Firm Supply-Part B

Industry Supply-Part A

Industry Supply-Part B

Monopoly-Part A

Monopoly-Part B

Monopoly Behavior-Part A

Monopoly Behavior-Part B

Factor Markets-Part A

Factor Markets-Part B

Oligopoly-Part A

Oligopoly-Part B

Game Theory-Part A

Game Theory-Part B

Game Applications-Part A

Game Applications-Part B

Behavioral Economics

Exchange-Part B

Production-Part A

Production-Part B

Welfare-Part A

Welfare-Part B

Externalities-Part A

Externalities-Part B

Information Technology-Part A

Information Technology-Part B

Public Goods-Part A

Public Goods-Part B

Asymmetric Information-Part A

Asymmetric Information-Part B

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A small economy has only two consumers, Zeke and Maude.Zeke's utility function is U(x, y)= x + 48y^1/2.Maude's utility function is U(x, y)= x + 4y.At a Pareto optimal allocation in which both individuals consume some of each good, how much y does Zeke consume?