ECO 108.01 â€“ .11Section #: ____Name: _____________________________Fall 2014(Please Print)Test #0Show your work and clearly indicate your answer! As specified in the syllabus, this test is 10% of your coursegrade or 0% of your course grade. If you want it to count for 10% of your course grade, sign your name in thebox below. If you do not sign your name in the box, this test will not count.(6)1. Consider the following two equations:y = 25 â€“ 2*xy = 5 + 3*x.Solve the two equations for the values of x and y which satisfy both equations.25 2* x 5 3* x 20 5* x x 4 y 17X = 4 & y = 17(7)2. Philâ€™s utility function is U( X, Y ) = min( 2*X, Y ).(4)a. What is Philâ€™s level of utility associated with the bundle ( X, Y ) = ( 10, 20 )?min( 2*10, 20 ) = 2020(3)b. What ( X, Y ) bundle is on the same indifference curve as ( X, Y ) = ( 10, 20 ) and has the smallest quantities ofboth Good X and Good Y?( X, Y ) = ( 10, 20(6)3. Ify 10* x3 4* x 12, finddy.dxdy30* x 2 4dx(15)4. Consider a model with two people and two goods, Good X and Good Y. Suppose both people have linearindividual PPFâ€™s.a. Is it possible for the same person to have a comparative advantage in the production of both goods?Nob. Is it possible for the same person to have an absolute advantage in the production of both goods?Yesc. Is it possible for their joint PPF to be a single straight line?Yesd. Suppose neither one of them has a comparative advantage in the production of Good X. What can you say abouttheir joint PPF?See c.e. Suppose neither one of them has a comparative advantage in the production of Good X. What can you say abouttheir individual PPFs?They have the same slope.1(25)5. A firm produces and sells Good X. The following diagram shows a graph of the firmâ€™s weekly profit at levelsof output between 0 and 46, i.e.Note that the level of X, the quantity of Good X the firm sells in a0 X 46.week, is shown on the horizontal axis and the firmâ€™s profit at each level of output is shown on the vertical axis. Youcan assume that the firmâ€™s profit continues to decrease for levels of output above 46.$3020Profit100-10-20-30-40-50-60051015202530354045X50Close to the following.Use the diagram to answer the following:(4)a. Estimate the range of output over which the firmâ€™s profit is increasing.4.69