Answers to practice worksheets

[Jay]

Hi everyone,

Does anyone still have the answers to the "Other utility functions: R/C and C1/C2" and "Consumer Surplus and Market Demand" worksheet, or will they be posted up on the website? I just tried doing these problems with the extra problem set on Gauchospace and the CLAS review and got them all wrong...I'm not sure what steps I did incorrectly. I followed the worksheet from Lindsay's section but still don't understand why. 

[J]

In the topic I posted "Market Demand worksheet help?" I posted a scan of my answers for the Market Demand side and Lindsay cleared my work as correct, you can refer to that one

My advice for solving problems is just to remember that all of these maximization problems go back to the original budget constraint of 

px*X+py*Y = M

just in a different way.

Every "good" has a price, but instead of goods, we work with things like recreation and consumption, consumption in the good or bad state, or present and future consumption. 

Most of these problems can be solved by taking the MRS and setting them equal to the price ratio. Just like solving a normal utility maximization problem. And the rules from old functions apply as well: perfect substitute functions involve all of one and none of the other, quasilinear increasing functions are concave, and quasilinear decreasing functions are convex.

Remember to keep your problems in terms of their variables and wait until the end to plug them in, that way when you're dealing with price changes, you can just put in the new prices into the formula that got you your original solution. This is especially useful when we're talking about SE and IE, so that you can solve for points A and C right away.