HW32022
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HW3
问题 1
A Giffen good must be an inferior good.
问题 2
The Slutsky substitution effect measures the movement between two points on the same
indifference curve.
问题 3
If two goods x and y are perfect complements, then if the price of x falls, the entire change in the
demand for x is due to the income effect.
问题 4
An increase in the interest rate can not make a lender who satisfies WARP becomes a borrower.
问题 5
If a consumer can borrow and lend at the same interest rate, then he can exactly afford a
consumption plan if the present value of his consumption equals the present value of his income.
问题 6
If the nominal interest rate is 4% and if prices fall by 4% per year, then the real rate of interest is
approximately 8%
问题 7
Consumer's surplus is another name for excess demand.
问题 8
With quasilinear preferences, the equivalent variation and the compensating variation in income
due to a tax are the same.
问题 9
Cindy consumes goods x and y. Her demand for x is given by x(px;m) = 0.05m-5.15px. Now her
income is 419, the price of x is 3, and the price of y is 1. If the price of x rises to 4 and if we
denote the income effect on her demand for x by DI and the substitution effect on her demand
for x by DS, then:
DI = -0.28 and DS = -0.52.
DI = -0.28 and DS = -4.88.
DI = -0.52 and DS = -0.52.
DI = 0 and DS = -2.00.
问题 10
Rob consumes two goods, x and y. He has an allowance of $50 per week and is not endowed with
either of the goods. If the price of good x increases and his substitution and income effects
change demand in opposite directions:
good x must be a Giffen good.
good x must be an inferior good.
WARP is violated.
good x must be a normal good.
问题 11
Goods 1 and 2 are perfect complements and a consumer always consumes them in the ratio of 2
units of Good 2 per unit of Good 1. If a consumer has income 720 and if the price of good 2
changes from 8 to 9, while the price of good 1 stays at 1, then the income effect of the price
change: is 9 times as strong as the substitution effect.
does not change demand for good 1.
accounts for the entire change in demand.
is exactly twice as strong as the substitution effect.
问题 12
Harvey Habit has a utility function U(c1; c2) = min(c1, c2) where c1 and c2 are his consumption in
periods 1 and 2 respectively. Harvey earns $189 in period 1 and he will earn $63 in period 2.
Harvey can borrow or lend at an interest rate of 10%. There is no inflation.
Harvey will save 60.
Harvey will borrow 60.
Harvey will neither borrow nor lend.
Harvey will save 124.
问题 13
If a consumer views a unit of consumption in period 1 as a perfect substitute (one-for-one) for a
unit of consumption in period 2 and if the real interest rate is positive, the consumer will:
consume only in period 1.
consume only in period 2.
consume equal amounts in each period.
consume more in period 1 than in period 2 if income elasticity exceeds 1, else would consume
more in period 2 than in period 1.
问题 14
Molly has income $400 in period 1 and income $600 in period 2. Her utility function is c1ac21-a;
where a = 0.4 and the interest rate is 0.2. If her income in period 1 doubled and her income in
period 2 stayed the same, her consumption in period 1 would:
double.
increase by 160.
increase by 80
stay constant.
问题 15
At the initial prices, Teodoro is a net seller of apples and a net buyer of bananas. If the price of
apples decreases and the price of bananas does not change:
the compensating variation must be negative and the equivalent variation positive.
the compensating variation must be positive and the equivalent variation negative.
both the compensating variation and the equivalent variation must be positive.
both the compensating variation and the equivalent variation must be negative.
问题 16
Sam has quasilinear preferences and his demand function for x is D(p) = 15-p/3. The price of x is
initially $15 per unit and increases to $24 per unit. Sam's change is consumer surplus is the
closest to:
-168.
-76.
-27.
75.
问题 17
Ella's utility function is min(4x, y). If the price of x is 15 and the price of y is 20, how much money
would she need to be able to purchase a bundle that she likes as well as the bundle (x, y) = (5, 8)?
92
198
190
235
问题 18
Patience has the utility function U(c1; c2) = c10.5+2c20.5 where c1 is her consumption in period
1 and c2 is her consumption in period 2. She will earn 100 units of the consumption good in
period 1 and 100 units of the consumption good in period 2. She can borrow or lend at an
interest rate of 10%.
a) Write an equation that describes Patience's budget.
b) If Patience neither borrows nor lends, what will be her marginal rate of substitution between
