1.Is the statement true or false? Try to correct it with the options given if possible: Cobb-Douglas preferences and perfectly complementary preferences are also homothetic preferences.

a.True as is.

b.False as is. And uncorrectable given other options.

c.False as is.But you could replace "complementary" with "substitutable."

d.False as is.But you could replace "complementary" with "quasi-linear."

2.True or false - and correct the statement if possible: Direct revealed preferences refer to observing choice behavior given two affordable bundles and a budget set.

a.The statement is true when we replace the term "affordable" with "unaffordable"

b.The statement is true when we replace the term "direct" with "indirect"

c.The statement is false

d.The statement is true as is.

3.True or False; and correct if the options allow. Hicksian income effect can be different from the Slutsky income effect.

a.True as is.

b.False as is.

c.False because "income effect" should be "substitution effect."

d.False because there is no difference in Hicksian and Slutsky income/substitution effects.

4.Given the demand function x1 = 5 + m/(p14) | Income: m = 100|Old scenario: p1 = 7| New scenario: p1 = 9 This is a price increase Calculate the income effect:

a.-0.4008

b.-0.3714

c.-0.2548

d.-0.4769

5.Charlie's utility function is U (x, y) = max{x, 2y}.

If x = 10 and 2y < 10, then U(x,y) =

a.Less than 10

b.More than 10

c.Exactly 10

d.Depends on other factors

6.Given the demand function x1 = 5 + m/(p14)

Income: m = 100

Old scenario: p1 = 7

New scenario: p1 = 9

This is a price increase

Calculate the substitution effect:

a.- 0.1475

b.- 0.3175

c.- 0.2816

d.-0.4414

7.Given the utility function: U(x,y) = ln 2y + ln x

Calculate the MRS:

a.-(x/y)

b.-(y/x)

c.-(1/x)

d.-(1/y)

8.Given the utility function: U(x,y) = ln 2y + ln x

What is the slope of the indifference curve at the point (2, 1)?

a.-(1/2)

b.-2

c.-1

d.1

9.Mark's utility function is U(xA,xB) = xAxB. Suppose that the price of apples is 1, the price of bananas is 2, and Marks's income is 40.

Evaluate the two statements:

Mark can afford a bundle which would offer him utility of 150.

Mark can afford a bundle which would offer him utility of 300.

a.Yes, he can afford both bundles.

b.He can only afford the bundle that offers him utility of 150.

c.He can't afford either bundle.

d.Not enough information.

10.If price increases and the demand increases then this could be labeled as a Giffen Good.

a.True as is.

b.False as is and not correctable w/given options.

c."Giffen good" needs to be replaced by "ordinary good" to make the statement true.

d."Giffen good" needs to be replaced by "inferior good" to make the statement true.

11.True or False;

Hicksian substitution effect can be different from the Slutsky substitution effect.

a.True as is.

b.False as is.

c.False because "substitution effect" should be "income effect."

d.False because there is no difference in Hicksian and Slutsky substitution effects.