ECON 701 Midterm: Micro I prelim 2016-05-25_701
Document Summary
This exam has 4 questions and a total of 100 points. Answer each question in a separate exam book. If you need to make additional assumptions, state them clearly. Good luck: (25 pts) in a two-good world, consider the function e : r2. R+ de(cid:133)ned by e(p; u ) := u min(cid:26)p1; p1 + p2. Show that v is concave in y if u is concave in x. 2: (25 pts) consider a two-person two-period economy with one consumption good. Farmer 1 has one unit of the good in period 1; and has already planted a crop that will generate one unit of the good in period 2. Assume there is just one contingent claims market at the beginning of period 1: the only contingent contract that can be traded is for the delivery of the good contingent on farmer 1 dying. The farmers are constrained to not sell more of a contract than they can deliver.
