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‘Midterm Exam is consists of two parts: Multiple Choices and Long Answers.
The total point is 107. If your score exceeds 100 points, it will be counted as 100
TIPLE CHOICE @2 points with each 45 point)
4) You entra strand buy abl sa Do you ly eve conse sup
other drinks more.
it Duy the soda if your willingness to pay would be less than the
»
2 65) In the elevant price rangea demand curve for a Giffen good would be
A) horizontal ') vertical
©) downward sloping. wh
‘upward sloping,
7) The price of leisure
‘A)is immeasurable, fe measured as foregone eamings (wage)
©) depends on the number ofhours worked. _D) is the same for everyone.
'8) The Equivalent Variation for an increase in the price of a good is,
| hesitant area thon
eduction ina consumers income necessary to harm the consumer by as muuch asthe price
‘of money a consumer would accept tobe subject toa price increase.
Jn consumer's income necessary to eliminate the consumer's harm from a price
cece Lt
Pe esc cs aac te owe Juice ECON2061 Microeconomics Midterm Bxam 1
all 2022,
Long Answer (35 pts): Answer ALL questions
1. (15 pts) Suppose that parent with income I conmume two types of goods, child-care (Good X) ond
all other goode (Good ¥), Asaume thatthe original prices and income are Py = $1, Py = $l, and
T= $100. The uty fanetion even by
u(xY)
‘Now the government decides to aubsdie the price of childcare so the new prico paid by the parents
faduce to Py = $025. Answer the fllaving questions and show all the steps how you derive the
Y,
on ee
eee nse
beta rh ce
salary (income) is automaticaly adjusted with
x (CPU) thst, i there ian nation enusing
fich that the consumer ean afford the seme
