SUMMER ASSESSMENT 2022
ECON0013: MICROECONOMICS
Answer the question in Part A, and ONE question from Part B.I and ONE question from Part B.II.
This assessment accounts for 60 per cent of the marks for the course. Each question carries an equal
percentage of the total mark.
In cases where a student answers more questions than requested by the assessment rubric, the policy of
the Economics Department is that the student’s first set of answers up to the required number will be the
ones that count (not the best answers). All remaining answers will be ignored. No credit will be given for
reproducing parts of the course notes. The answer to each part of each question should be on at most one
page (for example A.1 has 6 parts and there should be at most 6 pages of answers to this). Any part of
any answer that violates this will be given zero marks.
ECON0013 1 TURN OVER
PART A
You must answer the question in this section.
A.1 Individuals in a market each have a total budget y to spend on two goods q1 and q2 at the prices p1
and p2 respectively. Their preferences are described by the utility function
u (q1, q2) =
{
Bq1 12 (A q2)2 , if q2 ≤ A;
Bq1, if q2 > A;
(1)
where A, B > 0 are preference parameters.
(a) Show that the quantity demanded of good 2 is
f2 (y, p1, p2) =
