MATH 131 Midterm: MATH 131 UMass Amherst m131-spring2005 Exam 1-F03

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31 Jan 2019
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Question 1 (a) h( p, u( p, w)) = x( p, w) . (b) ph( p, u( p, w)) = w . (c) px( p, e( p, u)) = e( p, u) . Question 2 note that xi(p, w) = hi(p, v(p, w)). , which implies x1( p, w) = p2. , x2( p, w) = w p2 p2 p1. Question 3 proof: let x = x(p, w) and x = x(p , w ). Walras" law to determine the demand of good 2. If p x w then w 3w/2. Next, suppose that px w. then 3w /4 w. then p x = 3w/2 9w/8 > w. Question 4 note that w = px = 36 and w = p x = 4 + x 2. If px w then 16 + 2x 2 36 (i. e. , x 2 10). But then p x > w , i. e. , 13 > 4 + x 2, i. e. , x 2 < 9.

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