1. Uma and Valerie live in the same town where they both face the same prices. Uma has preferences that can be represented by the utility function U(X,Y)=X+Y Valerie has preferences that can be represented by the utility function V(X,Y)=3X+3Y. Calculate their marginal cost and scale of preference of consuming good x1 over good x2

2 1. If the demand for widgets is inelastic, then when the price of widgets increases, revenues will:

Increase

3.Diminishing marginal rate of substitution necessarily implies that the marginal rate of substitution

4.What do you mean by the income effect

5.Assume (, ) = 4()0.5 + 10. What is the Marginal Rate of Substitution of y for x when x=2 and y=4?

6.The total effect of a price increase on its demand is smaller than the substitution effect 1. The government puts a price ceiling on the cost of a large pizza. Consumers will loose from this policy.

7.All goods, normal or inferior, satisfy the Law of Demand.

8.If markets for some addictive drugs are found to have a higher price-elasticity of demand than was often thought, and if many addicts have difficulty holding down steady, well-paying jobs, we might speculate that the most likely reason for the surprising elasticity estimates is that

9.what is the importance of studying microeconomics

10..Describe the scope of the economy