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

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Which think-tanks on economics do you use to keep up with the news?

Whenever I have spare time, I like to go to Bruegel site and check their section on publications in macroeconomics. Here I usually find small publications of 20 something pages. The size is just about ...
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Isoquant creator

I was wondering if anyone had an idea about the first author to have mathematically computed an isoquant or at least the first occurrence of a drawn isoquant ? My best guess would be F. Edgeworth in ...
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Finding Capital and Labor [on hold]

I am taking microeconomics courses and I encountered this in my study questions. A firm produces output with the production function Q=(KL)^-1/2 where K and L denote its capital and labor inputs, ...
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Finding an exchange rate and competitive equilibrium given an initial allocation and utility function [on hold]

I am attempting to solve the following question. "Smith and Jones are stranded on a desert island. Each has in his possession some slices of ham (H) and cheese (C). Smith is a choosy eater and will ...
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28 views

Producer's cost for buying full solution vs. buying parts

This may be a very basic question. From a producer's standpoint, what are the theoretical or empirical results on the comparison of cost between buying assembled or full solutions from suppliers vs. ...
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86 views

Elasticity of demand [on hold]

Suppose that house prices increase by 10%, and the total quantity of homes purchased decreases by 8%. What is the elasticity of demand of housing? Interpret your answer in the context of a 1% change ...
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7 views

Superlative and Cost-of-Living Indexes: how are they related?

I was reading about the Boskin Commission for CPI in the United States and the topic of finding formulas to have the inflation index number be a true cost-of-living index came up. From what I ...
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22 views

A sensible way to use spreadsheets for the average joe [on hold]

Well the situation is this.. I am a student and I get monthly allowance from my father. My father supports me, is financing a car and has a loan running. I know how to use excel at least for basic ...
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127 views

How does the ban on surge pricing affect the companies, customers and the economy?

Recently, there has been a ban on surge pricing in two of India's busiest cities, namely Delhi and Bangalore. I understand that surge pricing is a method to ...
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28 views

Binding constraints at second-best optimum

I am dealing with ex-ante asymmetric information problems, i.e. adverse selection and in particular I cannot understand what's the intuition behind the fact that only two out of four constraints ...
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23 views

Does the contract curve always have to connect the initial points on an edgeworth box? Why or why not?

What if the contract curve goes out of bounds? In that case, do I assume it superimposes itself on the axes it is closest to? I hope this was clear. Not sure how to explain this other than ...
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Math basics for Macro&Micro economics and econometrics

I have just been admitted to a graduate school for studies in economics and I major in public administration during my undergraduate time. I have learnt linear algebra, single variable calculus, ...
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68 views

How to find corner Pareto efficient allocations

I have some troubles in understanding how to find Pareto efficient allocation that are on the frontier of the Edgeworth box. I mean, the interior ones, can be found using the equality $MRS_A = MRS_B$, ...
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56 views

When the convexity assumptions fail

We constantly assume convexity in economics. Convexity of production sets, convexity of preferences etc. Is there literature that addresses when convexities fail? For example, is there any ...
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welfare economics journals

Does anyone know of journals related to welfare economics? If not, what is the next best alternative to find articles (preferably open access) related to current research in welfare economics? Thanks ...
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What's the effect of decrease of per-unit tax on a monopoly's equilibrium price, quantity and profit.?

In my opinion, a decrease in tax certainly improves profit. Since the Average cost and Marginal cost both shifts down, the price decreases and the quantity increases. Is my reason correct?
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If there is a small change in equilibrium quantity for a monopoly with linear demand function, what would be the change in total revenue/cost?

In my opinion, we have to know the elasticity. If the demand is elastic, than quantity decrease will reduce total revenue and total cost is reduced. Or we actually assume the elasticity?
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Is it true that in short run, a profit-maximizing firm expands output as long as marginal cost is greater than marginal revenue?

For profit-maximizing firms, $MR=MC$. So when $MC\gt MR$, the $MC$ is rising, so the firm stops producing. But I am not sure. Could someone clarify?
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Pareto set and contract curve

I am having some troubles in distinguishing, from a theoretical point of view, between contract curve and Pareto set. I have looked around books and internet, and I have found that contract curve ...
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26 views

How to determine the marginal product for the following question? [closed]

Suppose that a firm has a Fixed cost of 10,000 dollars and Total Cost of 10,500 dollars for one unit and 11,100 dollars for two units of output. Which of the following is true for the Marginal Cost ...
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38 views

Substitutability vs complementarity of efforts

Suppose $n$ players are in joint production to produce a common output $v(a_1,a_2,...,a_n)$ with their individual actions $a_i$. Does the convexity or concavity of $v(a_1,...,a_n)$ in the actions say ...
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19 views

Diminishing Returns with Total Decreasing Value

I'm not sure where to look this up because I don't have enough grasp of the language of economics, but I'm looking for information about a phenomenon where the total value gained decreases as a single ...
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1answer
22 views

Which of the following explains that the price increase of oil cause the price of natural gas to increase?

A) Oil is inferior good while natural gas is normal good. B) Both of them are normal good. C)They are substitute goods and the higher price for oil increased the demand for natural gas. D)They are ...
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How do environmental deregulations push an economy inside its Production Possibility Frontier and make it inefficient?

I read in a textbook that if we plot a PPF with automobile manufacturing and clean air as the axes and the company pollutes the state making clean air (a public good) scarce, automobile manufacturing ...
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Does the world have less or more jobs than it did in previous times in human history? Is our current economic status overall better than the past? [duplicate]

This might be debated by politics but I ask to stick to numbers and what they show. I am a Journalism major and are studying economics for business writing. The theory I always believed was ...
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38 views

How do interest rates affect the distribution of wealth? [closed]

How do interest rates, on local and global scales of an economy, affect the distribution of wealth?
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fair penalty value decision [duplicate]

I am an engineer and I took a single course from department of economics. It was advanced Microeconomics theory. Currently, I am working on a paper and I want to add a section at the end to make ...
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45 views

Return on Assets vs Return on Investment [closed]

1) Is Return on Investment same as Return on Assets? There are so many different definition in books so I am now confused... 2) Is ROA = Profit before taxes/Total Assets or Profit after taxes/Total ...
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Inventory Turnover Ratio

Inventory Turnover Ratio is one of the efficiency ratios and measures the number of times, on average, the inventory is sold and replaced during the fiscal year. Cost of Goods Sold = c Beginning ...
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What is the point of the indirect utility function?

Where does this have application? I understand how the demand function may be arrived at using the utility maximization problem but I don't understand where the indirect utility function is used and I ...
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1answer
39 views

Understanding the Components of Optimization [closed]

What are policy function, objective function, constraint function, choice variables and parameters within the context of a utility maximization problem? I don't understand which each of these are ...
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55 views

Where do computational economists work

Does anybody know what kind of work or where computational economists end up working? It seems most end up in research...
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87 views

How to model the change in fossil fuel price?

What is the best way to model fossil fuel prices? I am trying to build an energy-economic model and changes in fuel prices are an important part of the model. I need to know how to model them. Any ...
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Why shouldn't the relative prices change in the Heckscher-Ohlin model?

I'm having trouble with the Rybczynski theorem. Let's say there's a migration to the domestic economy, increasing the Labor endowment. It states that the production of the good that uses labor more ...
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Because Sunk Costs can encode information, should Sunk Costs really be ignored?

Source: p 286, Principles of Economics (7 ed, 2014) by N Gregory Mankiw [1.] Economists say that a cost is a sunk cost when it has already been committed and cannot be recovered. Because nothing ...
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37 views

Robinson Crusoe Production Economy [closed]

Robinson Crusoe’s preferences over coconut consumption, C, and leisure, R, are represented by the utility function U(C, R) = CR. There are 48 hours available for Robinson to allocate between labor and ...
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How to consolidate data for “single customer view”, what models to use for representing customer? [closed]

There is trend to arrive at "single customer view" - combine all the available quantitative and qualitative data about single customer. How to organize those data for using in prediction and anylsis? ...
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33 views

How to find PS Nash Equilibrium?

Consider a population of voters uniformly distributed along the ideological spectrum from left $(x = 0)$ to right $(x = 1)$. Each of the candidates for a single office simultaneously chooses a ...
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maximizing leontief-type utility function

How do I maximize the utility function: $ U(x,y)= max(ax,ay)+min(x,y) $ , where $ 0<a<1 $ with respect to prices $ p_{x}, p_{y} $ respectively and income $ m $. I know leontief-type utility ...
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64 views

Finding cost from marginal cost [closed]

The cost of building a building is given by fixed cost $Cf$ = 900,000 and marginal cost (cost per extra meter) $Cm (y) = 3900 + 20y$, where $y$ is the height of the building in meters. What ...
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Overlaping jurisdictions Model: Proof of Lemma 1; The Size of Nations

I've been reading the book 'The Size of Nations' by Alberto Alesina and Enrico Spolaore (can be found on the net if you know where to look) and I'm having trouble following their "proof" of the first ...
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Consumer Choice [closed]

Which of the following statements are not consistent with the assumption of completeness and transitivity? Explain why. a) I just can't decide whether I would rather take a holiday in Spain or ...
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Is there a simple way to write a model with firms/sectors with different demand elasticities?

I would like to write down a model where there are firms with different demand elasticities: For some firm's total profits increase and decrease a lot with increases and decreases in demand for their ...
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1answer
41 views

Negative Externality with Tax and Free TRade [closed]

I am unsure of how to think about this negative externality question when there is both tax and free trade. A country is producing plastic, but it has a negative externality cost of 4 ...
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Quasilinear Utility: Pareto Optimality Implies Total Utility Maximization?

I read that if we have quasilinear utility for all consumers, then any pareto optimal allocation maximizes the sum of utility levels of all consumers. That is: $\textbf{What we know:}$ $$1)\quad ...
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154 views

Question on monopolist (involves simple calculus)

QUESTION: Consider the problem of a monopolist that sells its product in two different markets $m$, with $m=1,2$. Each market has an aggregate demand function given by $1200−α_m\cdot p_m$, where $p_m$ ...
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13 views

Which market form is x- inefficient?

As far as I understand, x efficiency measures the extent to which firms are being wasteful. This kind of inefficiency, I reckon, occurs in market forms where there is slight competition creating ...
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Why is the production possibility set convex?

I'm studying International Trade and came across this question: Suppose a specific factor model where the global production of something is given by $Q_{w}=Q_{1}(.) + Q_{2}(.)$, with $Q_{1}, Q_{2}$ ...
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Is there an economic term that means the same thing as “personal inflation”

I don't have anything even close to what would be considered formal education in terms of economics, so the term "personal inflation," is just something I completely made up. What I mean by personal ...
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Optimal Random Bids

This question comes from this website that I peruse often. Two players go on a hot new game show called “Higher Number Wins.” The two go into separate booths, and each presses a button, and a ...