Exam 1: Analyzing Economic Problems

A manager cares about the number of workers under her command.She can choose between two projects: Project A allows her to hire workers who must be paid W_A each,Project B allows her to hire workers who must be paid W_B each.She is allocated a budget of $100 that she can allocate to either project.Which of the following accurately represents the manager's problem?

Suppose the price of X is $15 per unit,the price of Y is $12 per unit,the consumer's income is $100,and the consumer's level of satisfaction is measured by XY + Y.The consumer's constraint is

An exogenous variable in a consumer's choice problem would typically be:

The analytical tools underlying nearly all microeconomic studies are:

Which of the following is not typically found in a constrained optimization problem?

Comparative statics

Identify the truthfulness of the following statements: I.Equilibrium analysis helps economists determine the market-clearing price. II.Comparative statics help economists analyze how a change in an exogenous variable affects the level of a related endogenous variable in an economic model.

Which of the following statements has both positive and normative aspects to it?

An equilibrium

Which of the following represents an example of positive analysis?

The three tools used repeatedly in microeconomic analysis are:

Constrained optimization,equilibrium analysis and comparative statistics are the three essential tools of

Suppose the equilibrium rent for apartments in New York City is $2000 per month.If the city authorities declared effective tomorrow that rents would not be allowed to exceed $1800 per month,what do you think would happen to the relationship between supply and demand for rental apartments in New York City?

Microeconomics examines

The definition of an exogenous variable is

Suppose that market demand for a good slopes downward and market supply slopes upward.Equilibrium price is now $10 and 500,000 units of the good are traded at this price.Suppose now that the cost at which each unit of the good is produced falls.What is the likely effect of this change on the market equilibrium?

An example of constrained optimization would be

Every society must answer

Suppose the price of is $3,the price of is $5,the consumer's income is $30,and the consumer's level of satisfaction is measured by The consumer's income constraint is

An endogenous variable is