If you don't mind please looking over my answers and pointing out any that I got incorrect? Thank you so much!!
1. The price of a pack of Pokemon cards is $5, and the price of a pack of baseball cards is $3. Suppose Will, whose preferences are complete, transitive, monotonic and convex, uses all of his income to buy 5 packs of Pokemon cards and 5 packs of baseball cards. At this consumption bundle, you could take away 4 packs of Pokemon cards if you give him 7 packs of baseball cards and not change his utility. Which of the following is necessarily true? (a) Will could increase his utility by buying more Pokemon cards and fewer base- ball cards. (b) Will could increase his utility by buying more baseball cards and fewer Pokemon cards. (c) Will could increase his utility by buying fewer Pokemon cards and fewer base- ball cards. (d) Will is already at his utility maximizing bundle. (e) None of the above2. Andrew's preferences for doing research and sleeping is U(xx, y) =6 . VS+ R, MUs = ; MUR = 1, where R is number of hours spent on research and S is number of hours spent on sleep. Opportunity cost of sleeping and doing research is the same and equal 1 hour (ps = PR = 1). What's Andrew's optimal schedule if there is only 24 hours in a day (1 = 24) (a) S=0, R=0 (b) S =9, R = 15 (c) S = 24, R=0 (d) S =6, R = 18 (e) None of the above.3. Assume Mr. Crawley always eats 1 biscuit (B) with every 2 cups of tea (T) that he drinks. He only enjoys an additional cup of tea if he gets : of an additional biscuit to go with it, and he only enjoys an additional biscuit if he also gets an additional 2 cups of tea. Suppose he has $56 per week to spend on tea and biscuits, and a cup of tea costs $3 while a biscuit costs $2. Mr. Crawley's utility function can be expressed as min(2B, T), and his optimal bundle is (a) 7 biscuits and 14 cups of tea (b) 0 biscuits and 14 cups of tea (c) 16 biscuits and 8 cups of tea (d) 16 biscuits and 0 cups of tea (e) None of the above4. Mary considers spoonfuls of sugar (S) and spoonfuls of medicine (M) to be perfect substitutes and always requires 10 spoonfuls of sugar to be willing to give up 3 spoonfuls of medicine (Notice that it means the spoonful of medicine is more valu- able for Mary than spoonful of sugar). Suppose sugar costs $2 per spoonful whereas medicine costs $6 per spoonful. Mary's income is $72. Mary's utility function can be expressed as , and her optimal bundle is (a) U(S,M)=10S + 3M; 0 spoonfuls of sugar and 12 spoonfuls of medicine (b) U(S,M)=3S + 10M; 0 spoonfuls of sugar and 12 spoonfuls of medicine (c) U(S,M)=10S + 3M; 36 spoonfuls of sugar and 0 spoonfuls of medicine (d) U(S,M)=3S + 10M; 36 spoonfuls of sugar and 0 spoonfuls of medicine (e) None of the above5. Ling likes hamburgers (H) and sliders (S). She views them as perfect substitutes and is always willing to trade 3 hamburger for 1 sliders. U(S, H) = 3S + H, MUs = 3, MUH =1 The price of a hamburger is denoted Pyx, and the price of a slider is denoted Ps. Ling's optimal bundle will necessarily contain (a) Only sliders if - 3 PH (b) Only hamburgers if .. 3 PH (c) Only sliders if PH and only hamburgers if PH (d) Only hamburgers if is
