ECON 357 Study Guide - Midterm Guide: Convex Preferences, Budget Constraint, Exchange Economy
6 Dec 2015
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Strongly suggested to redo all problems we did in class, during tutorials, and assignment questions. The following topics were covered during first part of term and will be tested on midterm exam: intertemporal choice. Varian ch 10: develop the budget constraint for consumer who is consuming over two time periods. Varian ch 12: fully insured consumer, contingent consumption plan, expected utility, risk loving, risk averse, risk neutral consumer. Varian ch 13: mean-variance utility, optimal portfolio choice, the capm, exchnage. Illustration of pure exchange economy using edgeworth box: analyzing the equilibrium, walras" law. Varian ch 33: ge framework with production, equilibrium with different production technologies, analyzing the equilibrium. In a pure exchange economy, ollie"s utility function is u(x, y) = 3x + y and fawn"s utility function is u(x, y) = xy. Ollie"s initial allocation is 1 x and no y"s. Fawn"s initial allocation is no x"s and 2 y"s. Draw an edgeworth box for fawn and ollie.
