ECON 601 Midterm: ECON 601 Iowa State Econ601Midterm1Fall12
Document Summary
Answer any three questions; answer all parts to each question (33 points) answer all parts: in a three good world, consider a proposed demand system: ix p p p w , {you may assume w is large enough so. , so that the demand system satisfies warp. x - i. e. , 3 so the solution is interior}: in a two good world, consider the following utility function: {hint use the foc for an interior solution}. What restriction, if any, does (strict) convexity imply about the demand functions or correspondences that are derived from these preferences? (3 points) if the utility function. U x represents the preferences of an individual. W x h u x who satisfies the convexity assumption, will the utility function where. H u : suppose an individual has the following utility function: 2 (3 points) draw an indifference curve for these preferences.
