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ECON 2300 (99)
Lecture

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School
Department
Economics
Course
ECON 2300
Professor
Vassilios Bardis
Semester
Fall

Description
ECON2300, V. Bardis Practice Set 1 1 Determine whether the following statement is True, False or Uncertain: If the price ratio, p /p , increases, then it must be true that the consumer can aﬀord fewer con- 1 2 sumption bundles than before. 2 On the same graph draw the following budget lines (i) 3x1+ 2x =26 (ii) 6x1+ 4x 2 6 (iii) 9x + 6x = 18 1 2 Which one of the three represents greater scarcity from the consumer’s point of view? If the consumer could “choose her circumstances”, which one of the three budget lines do you think she would she choose (and why)? 3 On the same graph draw the following budget lines (i) 4x1+ x 2 12 (ii) x1+ 4x 2 12 Which one of the two represents greater scarcity from the consumer’s point of view? If the consumer could “choose her circumstances”, which one of the two budget lines do you think she would she choose (and why)? 4 Show using total diﬀerentials that the slope of the budget line p 1 1p x 2 2 is equal to −p /p .
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