中级微观经济学测试题

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Intermediate Microeconomics Mid-term Test 2005 (A)

Name: Student No.: Class:

No. 1 2 3 4 5 6 7 8 9 10

Answer F

No. 11 12 13 14 15 16 17 18 19 20

Answer

No. 21 22 23 24 25 26 27 28 29 30

Answer

Section 1 True or false.（20 points, 2 points each）

1. With quasi-linear preferences, the equivalent variation and the

compensating variation in income due to a price increase of one good are the

same.

2. If all prices double and income triples, then the budget line will become

steeper.

3. A consumer who can borrow and lend at the same interest rate should prefer

an endowment with a higher present value to an endowment with a lower

present value, no matter how he plans to allocate consumption over the course of

his life.

4. The marginal rate of substitution measures the distance between one

indifference curve and the next one.

5. Fred has a Cobb-Douglas utility function with exponents that sum to 1. Sally

consumes the same two goods, but the two goods are perfect substitutes for her.

Despite these differences, Fred and Sally have the same price offer curves.

6. For a consumer who has an allowance to spend and no endowment of goods,

a decrease in the price of a Giffen good consumed makes him better off.

7. Alice's utility function is U(x, y) = x2y. Steve's utility function is U(x, y) = x2y

+ 2x. Alice and Steve have the same preferences since Steve's utility function is a

monotonic transformation of Alice's.

8. Susan is a net borrower when the interest rate is 10% and a net saver when

the interest rate is 20%. A decrease in the interest rate from 20% to 10% may

make Susan worse off.

9. If someone has a Cobb-Douglas utility function and no income from any

source other than labor earnings, then an increase in wages will not change the

amount that person chooses to work.

10. If two assets have the same expected rate of return but different variances, a 精品文档就在这里

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risk-averse investor should always choose the one with the smaller variance, no

matter what other assets she holds.

Section 2 Single Choice. (80points, 4 points each)

11. When the prices were ($5, $1), Vanessa chose the bundle (x, y) = (6, 3). Now

at the new prices, (px, py), she chooses the bundle (x, y) = (5, 7). For

Vanessa's behavior to be consistent with the weak axiom of revealed

preference, it must be that

A. 4py < px. B. px < 4py. C. 5py < px. D. py = 5px.

E. None of the above.

12. Henry's utility function is x2 + 16xw + 64w2, where x is his consumption of

x and w is his consumption of w.

A. Henry's preferences are strictly non-convex.

B. Henry's indifference curves are straight lines.

C. Henry has a bliss point.

D. Henry's indifference curves are hyperbolas.

E. None of the above.

13. In a certain kingdom, the demand function for rye bread was q = 381 - 3p

and the supply function was q = 5 + 7p, where p is the price in peso and q is

loaves of bread. The king made it illegal to sell rye bread for a price above

32 peso per loaf. To avoid shortages, he agreed to pay bakers enough of a

subsidy for each loaf of bread so as to make supply equal demand. How

much would the subsidy per loaf have to be?

A. 21 peso B. 14 peso C. 8 peso D. 5.6 peso

E. None of the above.

14. If there are only two goods, if more of good 1 is always preferred to less,

and if less of good 2 is always preferred to more, then indifference curves

A. slope downward. B. slope upward.

C. may cross. D. could take the form of ellipses.

E. None of the above. 精品文档就在这里

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15. Clarissa's utility function is U(r, z) = z + 120r - r 2, where r is the number of

rose plants she has in her garden and z is the number of zinnias. She has

250 square feet to allocate to roses and zinnias. Roses each take up 4 square

feet and zinnias each take up 1 square foot. She gets the plants for free from

a generous friend. If she acquires another 100 square feet of land for her

garden and her utility function remains unchanged, she will plant

A. 99 more zinnias and some more roses.

B. 20 more roses and 20 more zinnias.

C. 25 more roses and no more zinnias.

D. 100 more zinnias and no more roses.

E. None of the above.

16. Janet consumes two commodities x and y. Her utility function is min{x + 2y,

y + 2x}. She chooses to buy 10 units of good x and 20 units of good y. The

price of good x is $1. Janet's income is

A. $40. B. $50. C. $30. D. $20.

E. There is not enough information in the problem to determine her

income because we are not told the price of good y.

17. Bernice’s utility function is min {x, y}, where x is her consumption of

earrings and y is money left for other stuff (x and y can be fractional). If he

had an income of $12 and was paying a price of $4 for a pair of earrings,

then if the price of earrings went up to $6, the equivalent variation of the

price change would be

A. $4.80. B. $3.43. C. $1.71. D. $9.60. E. $4.11.

18. Jane's utility function is U(x, y) = x + 2y, where x is her consumption of

good X and y is her consumption of good Y . Her income is $2. The price of

Y is $2. The cost per unit of X depends on how many units she buys. The

total cost of x units of X is the square root of x.

A. The bundle (1/4, 3/4) is Jane's utility maximizing choice, given her

budget.

B. The bundle (1, 1/2) is Jane's utility maximizing choice, given her budget.

C. Given her budget, Jane would maximize her utility by spending all of

her income on good X.

D. Given her budget, Jane would maximize her utility by spending all of

her income on good Y .

E. None of the above.