Multiple choice : For Multiple choice type questions, Select the best answer for each question - Highlight thecorrect answer (yellow is preferred). No need to show / send your solutions. Problem 1 The Marshallian demand for good x and y is given by x ( Px, Py, M) and y (Px, Py, M), respectively. Calculate the income elasticity of good x. Is good x income elastic? Unitary? inelastic?. A. 1, income elastic B. -1, income unitary C. 1, income inelastic D. -1, income is perfectly inelastic Problem 2 Statement I : Income elasticity is simply the slope of the Engel curve multiplied by the ratio of Income to quantity. Statement II: Income elasticity is simply the proportionate change in quantity demanded in response to a proportionate change in income. A. Both statements are true. B. Both statements are false. C. Statement I is true, statement II is false. D. Statement I is false, statement II is true. Problem 3 Suppose you are an economist working for your city government. The city is currently facing a pandemic and you have been asked this question: "How many vaccines will be available by the end of December 20217". This question can be determined using_- A. Positive economics B. Normative economics C. Cannot be determined D. None of the aboveProblem 4 Find the point (x,y) that solves the following problem: "(x, y) = _Inx+ _Iny st. PxX + pyl =m 2 3 A. 1 m 2 px 2 pv 2 PM I mi B. X=. 4 py 3 m C. X=_ 2 m 5 px 5 py Im D. X= 2 171 3 px 3 py Problem 5 Consider the following inverse supply and inverse demand functions: P=B+QQ and P=6-Q, respectively. Find P* and Q* A. pe_1+6 8+B 0 = Y-0 Y-a B. p_ Pro _8-B' 6-B C. P*= 7-a D. p 1-6 + 0* -Y+a 8-B 6-BProblem 8 Maggie consumes apples and bananas. The price of apples is Php 2, the price of bananas is Php 4, and Maggie's income is Php 120. If the consumption of apples is measured on the horizontal axis and the consumption of bananas is measured on the vertical axis. What is the marginal rate of transformation? A. -1/3 B. -1/2 C. - 1 D. 1 Problem 9 Garry has the utility function U(x, y) =at + By Garry's preferences are illustrated by a L-shaped indifference curves. True or False? A. True B. False Problem 10 The utility function U (x, y) = - XV Exhibits a diminishing MRS. True or False? A. True Acti Go to B. FalseProblem 6 OD - OP + BP Suppose the demand for good x is and the demand for good y is 2 OD + of -PP . The supply of good ? is OS. a.B, QD.QS > 0. Solve for Px and 2 Py A. Pr' = os - d - ' (Qs -Qd ) and Py' = + 3 1 (Qs - Qd )+ (0s -Qd ) 4 5B L3 B. Px = - Os - Od + = (0s -Qd ) and Py' = [1(0s -Qd )+ (0s -Qu )] 4 2B C. Px' = [Qs -Qd +1(Qs -Qd )] and Py" =+ 2 1(Qs -Qd )+(Qs -Qd ) 4a I D. Px' = = 4 0s - od + ' (es -0d ) and Py" = - 4 (05 -Qd )+(Qs - Qd ) 2 3B L2 Problem 7 Suppose Salve views tea and coffee as perfectly substitutable for each other, and that both goods satisfies the same need. Her indifference curves are convex. True or False? A. True B. False
