14. Consider a consumer whose preference relation is represented by the utility function u(x1,X2) = X1 + (x2)". If the consumer is indifferent between the bundles (6,2) and (7,1), then (a) c = 1 (b) c=4 (c) c =2 (d) c =3 (e) c = 5 15. The output quantity 0 is not a profit maximizing quantity for a firm if (a) the setup cost is lower than the output price. (b) the marginal cost at the operational optimum (=efficient scale) is equal to the output price. (c) the firm has 0 setup cost, and the marginal cost at 0 is lower than the output price. (d) the output price is lower than the average cost at the operational optimum (=efficient scale). (e) the marginal cost at the operational optimum (=efficient scale) is higher than the output price. Version 9 Page 5 of 8 Microeconomics A UNIVERSITY Spring 2020 OF MANNHEIM Department of Fennemics 16. Consider an Edgeworth economy in which every A-trader has the utility function u (x1, X2) = x1(x2)", and every B-trader has the utility function u"(x1, x2) = Vx1 + x2. Every trader has the initial endowment (2,3). Then the following holds: (a) Every Pareto-efficient allocation can be obtained in a competitive equilibrium after an appropriate redistribution of the initial endowments. (b) At least one of the Pareto-efficient allocations can never be obtained in a competitive equilibrium, no matter how the initial endowments are redistributed. (c) None of the above statements is correct. (d) No competitive-equilibrium allocation exists. (e) No Pareto-efficient allocation exists. 17. Consider a market supply function S(p) such that S(16) = 56. Assume that S has unit elasticity at the point p = 16. These numbers yield the following estimation for the output quantity that is approximately supplied at the price 20: (a) 70 (b) 64 (c) 56 (d) 60 (e) 68 18. Consider a quasilinear exchange economy. There are 12 sellers which are denoted with the indices v = 1,2,..., 12 and 12 buyers which are denoted with the indices k = 1, 2,..., 12. Seller v = 1,...,12 is endowed with a car, for which she has the willingness to pay v + 5. Buyer k = 1,..., 12 has the willingness to pay 2k for a car; no buyer is interested in more than one case. Which price is the competitive equilibrium price? (a) 13 (b) None of the above answers is correct. (c) 15 (d) 14 (e) 12 19. The following set is the isoquant of a perfect-substitutes production function: (a) {(x1, x2) [ x1 2 0, x2 2 0,3x1 + 2x2 = 7} (b) {(x1, x2) | x1 20, x2 2 0, (x1)3 + (x2)2 =7} (c) {(x1, x2) [ x1 20, x2 2 0, (x1 )3 - (x2)2 =7] (d) {(x1, x2) [ x1 2 0, x2 2 0, min {3x1, 2x2} = 7} (e) {(x1, x2) [ x1 2 0, x2 > 0,3x1 - 2x2 = 7}