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

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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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30 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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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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34 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
73 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
39 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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0answers
16 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
43 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
27 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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45 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
38 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
30 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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38 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
26 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
34 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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0answers
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
39 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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3answers
42 views

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 ...
4
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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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0answers
17 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
35 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 ...
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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
24 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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50 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
46 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 ...
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2answers
50 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
125 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
48 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
49 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
44 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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110 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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32 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 ...
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1answer
60 views

Does vNM rationality depend on the good chosen?

The von Neumann-Morgenstern theorem states that, assuming a person's preferences under risk satisfy certain rationality axioms, then there exists a utility function u, the von Neumann utility ...
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31 views

How does this company gain from economies of scale?

Given this story, I am (my younger brother is) asked why (rather than how?) a particular company Pepper plc is likely to benefit from economies of scale. In short, Jo has a shop that sells electrical ...
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20 views

Compound Interest Calculation (Years + Months)

My question is with regards to the calculation of "Compound Interest". I have the formula below where I would get an answer to the total value of the investment over a period of "years". A = Future ...
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2answers
76 views

How to derive cubic cost function from a problem of constrained optimization?

The cubic total cost function usually take the form $TC(q)=a+bq+cq^{2}+dq^{3} \qquad a,b,d>0, c<0$ and $c^{2}<4bd$ I know that from a constraint maximization problem $min\quad wL+vK$ ...
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3answers
81 views

What's the role of initial endowments in an edgeworth box?

I am trying to solve a problem but I don't see the role of initial endowments. For instance, the question is about finding competitive equilibria. But there is information about initial endowment. How ...
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1answer
53 views

Why do all apartment complexes in Albuquerque have pools?

Apartment builders have a constrained optimization problem whereby they balance building different amenities to attract tenants with varying preferences. Recently when searching for apartments I ...
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1answer
32 views

Budget constraint hyperplanes

This question relates to a specific paper by Eric Budish, published in 2011 in JPE, but I've tried to put all relevant information in this question. On page 1072, he defines budget constraint ...
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1answer
29 views

Find Change in output from marginal products of labor/capital

A firm produces 231 doohickeys with 8.4 units of labour and 22.1 units of capital. the marginal product of labour is 18, the marginal product of capital is 20. Approximately how many doohickeys will ...
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49 views

Minimization of costs combination of factors of production

Given the production function $D(x,y,z)=\min\{2x, \left( 2y+4z\right)\}$, and knowing that P-price $P_x=30,P_y=20,P_z=5$ and volume of production $D=200$. How much of x,y and z is needed to minimize ...
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1answer
62 views

Intertemporal consumption question

This question is driving me nuts. Suppose, an individual lives for two periods. In each period she consumes only one good,which is rice. In period 2, she can costlessly produce 1 unit of rice, but ...
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1answer
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How to write the dual problem of this maximization problem?

On this note for Shapley-Shubik model, there's a maximization problem: $$\max_{x_{ij} \in \mathbb{R}^{M \times N}}\sum_{j \in N}\sum_{i \in M}v_{ij}x_{ij}$$ $$\text{s.t.} \ \sum_{j \in ...
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Finding equilibrium of perfect competition in the short run with a cost function

I am having a lot of problems trying to find the equilibrium price when we are given a cost function and demand function, but no supply function. All firms have the following production function: ...
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2answers
87 views

How can I draw an edgeworth box with 3 different goods?

If there are 3 types of goods(x,y,z) and 2 consumers (a,b) how can I draw the Edgeworth box? It must be 3 dimensional, right? Is there a software or online tool that I can use to draw a 3D Edgeworth ...
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0answers
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eBay economics - total revenue impact from expanding ecosystem by 1 seller

While I think my question is straight forward, I'm guessing the answer to it is anything but. Thanks in advance for any insight you may be able to offer, even if it's just a directional assist. ...
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If I gain, then someone else loses. Correct?

On a very small scale, it's certainly true that if I gain, somebody else might lose. If I take away my brother's chocolate, then he will lose it, and will most probably not get anything comparable. ...