ECO370Y5 Final: Testable Exam Questions

A question about utility maximization.

Nancy Lerner is trying to decide how to allocate her time instudying for her Economics course.There are two examinationsin this course. Her overall score for the course will be theminimum of her scores on the two examinations.She has decided todevote a total of 1,200 minutes to studying for these twoexams, and she wants to get as high an overall score aspossible. She knows that on the first examination if she doesn’tstudy at all, she will get a score of zero on it. For every 10minutes that she spends studying for the first examination,she will increase her score by one point.If she doesn’tstudy at all for the second examination she will get a zero onit. For every 20 minutes she spends studying for the secondexamination, she will increase her score by one point.

What is Nancy's utility maximizing scores for exam 1 and exam 2?What is her maximum utility? Find how much time she must spend oneach exam to maximize her overal score?

I am able to determine that Nancy's budget line here would be 10X +20Y = 1200, where X = exam 1 score, Y = exam 2 score, however, I amhaving trouble determining the utility maximization since I can'tfigure out how to determine her utility function, U(X, Y), fromthere I can use the Lagrangian method to determine how to maximizeher utility. It could be that I am going about this the wrong waythough. Any help would be appreciated.

Thank you.

2 . In the recent past, small business lenders (for example 'biz2credit', 'kabbage', 'CANCapital', and 'LendingClub') have become popular. Their major function is to provide loans to small businesses to carry on the day-to-day business operations. You may not need to do research in order to answer the following questions. But most definitely you would have to use your analytical mind and make connections to the material learned in the class.

a) Why are these lenders important to the financial system? Include the competition from the financial institutions (such as commercial banks, shadow banks) discussed in the class.

b) What do you think about the long run sustainability of these lenders? Think about what does it take to survive as lenders and what may be major hurdles for their survival.

Question: What is the "current macroeconomic situation" in the U.S.(e.g. is the U.S. economy currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and monetary policies would be appropriate at this time?

1. Write your individual answers to the questions listed above together in essay format (minimum of 300 words combined in APA style), using correct economic terms covered in the discussions. If you only write 300 words, you probably won't be able to fully answer the questions. Use the APA Template in Doc Sharing as a guide. You will also find the grading rubric for this assignment in Sharing.

2. Key concepts to include in your paper--data trends on unemployment, inflation, GDP growth, expansionary fiscal policy tools, FOMC, easy money policy tools, and other terms from this class.

3. You must use at least one article. Note: The textbook is not an article and cannot be the only source for the assignments. Use the DeVry Library as a resource for finding your references.