Microeconomics is a branch of economics, that studies the market behavior of individual consumers and firms.

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Cobb-Douglas Utility

Cobb-Douglas functions are neither gross subs or gross complements. However, can they be either net subs or net complements or are they always only net subs or only net complements?
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1answer
15 views

Real world example of using difference quotient vs. derivative

When would you use the difference quotient in an economic model rather than the derivative to assess the change in some endogenous variable? Real world examples seem to be lacking in textbooks on ...
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1answer
26 views

Monotone transformation of utility

We have learned that any "strictly positive monotonous transformation" of utility functions is okay, as long as they preserve the ranking of choices implied by the underlying preferences. Consider ...
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18 views

Reference request for this topics [closed]

I am a statistics student and I'm now learning basic things about economy, I would like to learn is Basics of economy. Introduction to macroeconomics. Globalization and productive restructuring. ...
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1answer
24 views

Production function and isoquant slope

Given the company's production function $f(L,K)=L^{1/3}K^{3/4}$, find slope of the isoquant passing through $(L,K)=(20,40)$ is equal to $-4/5$ (K is on the vertical axis). I need to state whether ...
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22 views

Question about nested input requirements

In Michael Carter's "Foundation of Mathematical Economics" we have the following exercise: Prove that the input requirement sets are nested. That is, prove that $V(y') \supseteq V(y)$ $ \forall $ ...
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2answers
26 views

Price elasticity of demand -calculation [closed]

ln(Q)= 10-0.7ln(P) where P is price and Q is demand. What is the price elasticity of demand? Anyone can help with this question? Thank you
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1answer
38 views

Help trying to find Economic Profit for a Monopoly

I'm given a demand function ( $p = 60-.002q$), Marginal Cost (\$10) and Fixed Costs (\$300,000) for a monopoly. I've figured the profit maximizing output and price: Marginal revenue function $MR = ...
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28 views

Find the price function from the elasticity

If a company sells 12500 units at a price of 153.75 and the price elasticity at 37500 units is -0.7, how can I compute the total revenue? I know that $TR=P(Q)\cdot Q$, so I need to find P(Q). I know ...
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1answer
43 views

Does the hoarding of perishable goods such as pulses and cereals make economic sense?

I was thinking about the idea of hoarding and the kind of news it is making in India. What strikes me is that hoarding of pulses and cereals does not happen the way people thinks because they are a ...
3
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1answer
39 views

Does contract curve orthogonal to the priceline?

An exchange economy with two consumers A and B,two goods x,y. Consumers have identical preferences U=xy. Total available endowment are ex and ey. This is the background of a homework question which ...
2
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1answer
120 views

Price ratio determined by endowments only?

Am I right to say in an Exchange Economy with two consumers with identical preferences, the equilibrium price (WEA) of the two goods would be determined by availability of two goods, i.e, total ...
2
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2answers
44 views

Why is instantaneous utility of current period discounted?

Consider a two period model of consumption. I'm confused by the fact that in the optimum condition it is the marginal utility of the current period that is discounted, not the marginal utility of the ...
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31 views

How are price and quantity demanded going to be affected?

The consequences of decriminalizing illegal drugs have long been debated. Some claim that legalization will lower the price of these drugs and reduce related crime and that more people will use these ...
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0answers
40 views

How do supply chains form?

I am trying to put forth a theory for endogenous supply chain formation. A set of $K$ complementary tasks need to be performed to manufacture a good $G$. If manufactured, there exists a demand ...
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1answer
33 views

Comparing two groups of individuals

I am trying to show that 2 groups of individuals are intrinsically the same. I have various characteristics to measure for both group A and group B, such as height, weight, age, etc. I have taken the ...
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1answer
35 views

What term/theory describes more efficient utilization of a resource?

I may be asking the wrong question here, but I wonder if there is a term/theory that describes/studies the evolution of an economy that continually improves the utilization and allocation of certain ...
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0answers
23 views

Semi Annual Deposit that earns 5% Compounded Quarterly

I was asked: A man planned to endow 1000000 USD to his son on his son's 21'st birthday. How much is his semi-annual deposit in a special account that earns 5% compounded quarterly if the first ...
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0answers
39 views

Interpreting coefficient in the disutility function as disutility tolerance?

I am studying a model that relates incentives (money) and a set of actions. Let $f(x) = k\frac{x^2}{2}$ be the disutility function of the agent, where $x$ is the level of effort that the agent is ...
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2answers
75 views

Marginal Utility with Supply and Demand Curves

Can someone explain how the equilibrium points in the image below (source: The Foundations of Econometric Analysis) represent marginal utilities. I have read about the relationship between the ...
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2answers
41 views

Why do lump sum transfers affect prices?

Let's suppose that I want to maximize total welfare (Social Planner Problem) using lump sum transfers to individuals. It's known then that the price ratio changes relative to when there are no lump ...
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3answers
2k views

Is scalping tickets harmful?

IMHO, scalping tickets is no different from legitimate arbitrage unless manipulative. Iirc, arbitrage increases surplus and hindering scalping is setting a price ceiling which leads to deadweight ...
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1answer
47 views

Can't Derive Expectation in Second Price Auction

I'm working on a SPA where we solve: $\max_{\beta \ge 0} Pr\{Winning\}[v - \mathbb{E}(b^{[2]} \ | \ b^{[2]} \le \beta)]$ We assume all beliefs on bids are independently and identically distributed ...
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2answers
46 views

Is ongoing economic growth possible without additional non-renewable inputs?

Can ongoing economic growth occur without use of additional non-renewable inputs? That is, any additional inputs would only be from renewable resources: all non-renewable resources would be reused, ...
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0answers
34 views

Sequential games and Perfect Bayesian Equilibrium

Reading the paper http://www.sciencedirect.com/science/article/pii/002205319190155W I came up with the following question. Given that this paper deals with games in which players move ...
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2answers
108 views

Why is airbnb more expensive than priceline?

Some might say I have an addiction to Priceline Name Your Own Price, however, what I can tell you is that NYOP rates for 2.5* and 3* hotels are always better than the room options offered through ...
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1answer
47 views

Best resources to self-educate myself in economics

I want to learn Economics by myself and I'm looking to build a path with people who're in this field to how and in what order should I learn Economics, I did some research and I've found many ...
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1answer
31 views

Competition between utilities like ports

I was reading about the frequent congestion in US ports and the resulting effect on the US economy. I feel there are unique features to this setting. When ports face congestion, they levy charges, and ...
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39 views

Multiproduct firm

I am currently reading the book "Microeconomics: Principles and Analysis" by Cowell on my own. I'm interested in the section of the multiproduct firm, but i'm confused with the use of the profit ...
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1answer
27 views

Economic Overview of Pacific Island Nations

What are the key drivers of growth for these small pacific island nations? I would expect tourism and natural resources to be pretty central to these economies. Is there anything else? What are the ...
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1answer
37 views

Estimate total variable cost function (TVC) and average variable cost function (AVP) from marginal cost function (MC)

I need to estimate the function expressions for $TVC$ and $AVC$ from the $MC$ function for different amounts of quantity $(Q)$ From the solutions I have, that For $Q \leq 50$ $MC1(Q) = -Q + 100$ ...
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15 views

Impact of Economic Crisis on Supermarkets And Chemists?

In the undergoing Greek financial crisis, I’ve heard more than once that the three prime sufferers in any economic crisis are the 'bankers', 'supermarkets 'and 'chemists'. I do understand why the ...
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1answer
42 views

Marginal rate of technical substitution for multi-dimension inputs? [closed]

Suppose I have a vector x = ($x_1,x_2,x_3,x_4,x_5$) of inputs. How it is the MRTS($x_1,x_2,x_3,x_4,x_5$) ? And which is the relation with the marginal products of inputs 1-5 ?
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Are there two different meanings of the discount rate?

Today I suddenly became aware of how the term "discount rate" are frequently used in two different contexts: When people prefer to have something now rather than in the future. The reason is ...
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1answer
53 views

How long are consumers willing to wait in order to find a bargain?

I have (what I believe to be) a microeconomics question that I'd like to explore: How long are consumers willing to wait to find a bargain on an item they'd like to purchase? I believe the ...
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1answer
58 views

Indirect Impacts Of The Netherlands Cutting Greenhouse Emissions?

On 24 June 2015, the Dutch District Court in The Hague ruled that the government must put policies in place to deliver, by 2020, cuts in the country's greenhouse gas emissions of at least 25%, ...
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20 views

Appropriate economic/econometric tools to analyze segmented promotion optimization problem

I'm trying to determine which micro-economic/econometrics concepts, models, and/or tools are appropriate for an analysis of promotions. Below I Describe the problem in general terms Give ...
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1answer
39 views

Is there existing research on predicting the number of house listings based on exogenous data?

I've been looking for prior research by economists that predict the number of house listings in a particular city (or even, say, the probability that an individual in the city will list his house that ...
3
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1answer
48 views

Monopoly with price discrimination

A city has a single electricity supplier. Electricity production cost is $c$ per unit. Utility function $U(q,t)=a\ln(1+q) - t$, where $q$ is electricity consumption and $t$ is electricity tariff. What ...
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1answer
28 views

Is the lack of information on customer behaviour good for banks?

Discussing chapter 18 on Microeconomic Theory Basic Principles and Extensions - Nicholson and Snyder book - regarding Asymmetric information a student raise an interesting point of view regarding the ...
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62 views

Why is AC = MC in the monopoly?

Using the Microeconomic Theory Basic Principles and Extensions, Nicholson, W. and Snyder, C., I've reached to the point where Monopoly and Imperfect Competition is discussed (Chapter 14 and 15 to be ...
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1answer
49 views

Why does profit maximization implies that both of the following are equal? [closed]

Why Profit maximization implies that rate of return to capital equals the net marginal product of capital. Prove and give intuition why both are equal. I also wonder that why it doesn't implies rate ...
2
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2answers
60 views

Clarification about Market Structure Oligopoly or Monopoly

As per the definition i found in the internet, • Oligopoly, in which a market is run by a small number of firms that together control the majority of the market share. • Monopoly, where there is ...
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4answers
140 views

list of math intense graduate level microeconomics books?

List of math intense graduate level microeconomics books? Except Reny's book, krep's books, varian's book and mas-collell's book books from subfields are acceptable, however by math intense i mean ...
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1answer
56 views

How to derive utility possibility frontier?

I'm trying to derive the utility possibility frontier of a economy whose consumption contract curve is $$y_A = \frac {y} {x} x_A$$ and $$y_B = \frac {y} {x} x_B$$where $x_A + x_B = x$ and $y_A + y_B= ...
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1answer
57 views

I need something like “how to calculate equilibrium price for complete idiots”

My grandfather raises, sells and resells livestock and I want to help him by calculating when and for what price to (re)sell or buy livestock. As far as I understand(although I have a hunch that I ...
4
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1answer
51 views

Present-bias vs future-bias

There is a huge literature in economics that studies time-inconsistencies in decision-making and that consistently finds that individuals make present-biased choices in a variety of contexts: we do ...
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2answers
113 views

Is it true that $\frac{dL}{dq}=1/\frac{\partial q}{\partial L}$?

Marginal costs MC is defined as $MC=\frac{dC}{dq}$. Taking into account that $C=wL+rK$, $$MC=\frac{dC}{dq}=w\frac{dL}{dq}+r\frac{dK}{dq}$$ Recall that marginal product of labor ...
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1answer
35 views

In a competitive equilibrium, can price of a commodity ever be zero?

I don't think they can be, but I'm not very sure. Are their special cases where the equilibrium is competitive even when prices are zero?
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1answer
20 views

RBC model and indivisible labour

First of all, I would like to apologise for the fact that I will include a link in my question rather than a direct question, however, I have no idea how to do it in a different way. I have been ...