# All Questions

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### How do EMH proponents explain Black Monday (1987)?

On Black Monday (19 Oct 1987), the Dow Jones Industrial Average fell by 22.6%. How do proponents of the Efficient Markets Hypothesis (EMH) explain this event? Do they actually claim that the intrinsic ...
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### Is it possible to solve the PPAD problem by market in an acceptable time?

For PPAD problems, see https://en.wikipedia.org/wiki/PPAD_(complexity). It says,"PPAD is a class of problems that are believed to be hard, but obtaining PPAD-completeness is a weaker evidence of ...
31 views

### Integral solution (or a simpler) to consumer surplus - What is wrong?

Problem Given demand $D(p)=A-ap$, and $A,a>0$ and a fixed price $0<p_1<A/a$ by some company. Calculate the consumer surplus and its derivative with respect to $p$. What is this number? My ...
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When I was in university, I remember studying some kind of topic in adv microeconomics where someone gives you three options, where one is obviously worse and is put there just to deceive you so that ...
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### GDP of domestic and foreign economic activities of a country

Is there an indicator which shows how much GDP of a country is generated by domestic economic activities (e.g. business between food production in Germany and agriculture in Germany) and how much GDP ...
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### Research in Economics [closed]

I have degree in Business , but take Economics for Master. Therefore, I really don't have strong base knowledge about Economics and Econometrics. So, for this Master, we will have to do research ...
23 views

### Identifiability of Non-Parametric Utility Function?

I recently learned that EU characterized by independence and weak ordering is identifiable, but a utility function like: $U(x)=v_1(x)v_2(x)$ is not identifiable. Does it mean that "cardinal ...
12 views

### new unique price to maximize profits [closed]

Realizing the discriminatory scheme used by airline 1, you create the other firm, that takes customer orders and re-route them to airline1 via a PC. That is, to serve a customer, firm2 buys the flight ...
13 views

### Human capital theory

https://ocw.mit.edu/courses/economics/14-03-microeconomic-theory-and-public-policy-fall-2016/lecture-notes/MIT14_03F16_lec20.pdf This may be a reach asking on this platform, however does anyone know ...
23 views

### Solving problem for optimal price (maximize profit) *attempt inside*

Let a demandfunction be defined as $D(p)=B-bp$, where $b,B>0$. A firm has some production cost, $c$, and can set the price $p$ under the constrain given by the Demand. What is the optimal price? ...
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### Philippines SDG prioritization

If the Philippines only had enough funds to prioritize just 5 Sustainable Development Goals (SDGs), what 5 goals should the Philippines pick? taking into account past tragedies that occured; typhoons ...
16 views

### How to calculate the allocation that maximises social welfare [closed]

These are the valuations of b (book), p (pen), and n (notepad). I'm incredibly new to this and I have been trying to google what to do for the past 3 hours. How can I compute the allocation of these ...
48 views

### homothetic functions in economics

Are there any results in economics that require function to be homothetic? The textbook I am using (Essential Mathematics for Economic Analysis) says that function is homothetic when " $f(x)=f(y)$...
38 views

### Effect of price on utility

A consumer has an endowment vector $w$; at prices $p$ his demand for the first good exceeds his endowment; $x_1^+(p; pw)>w_1$ then a small increase of $p_1$ will lower his utility. I was discussing ...
22 views

### The current economic understanding of the effect of labour unions on employment and wages

What are the currently largely accepted views on the effect of labour unions on employment and wages? Where can I read more about the currently established theoretical models that model labour unions?
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### If a rational preference relation over simple lotteries $\succsim$ are convex then they satisfy independence?

Let´s say there is an uncertain situation with $N$ possible consequences $C = \{C_1, . . . C_N\}$. Assume that there is a rational preference relation $\succsim$ over simple lotteries. I know that if ...
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### Would some help me fill in missing steps from a textbook exercise left for the reader

Question: Suppose $C_t=(1-s)Y_t-\lambda G_t$ where $s>\sigma$ as in the basic Solow model. Out of the government expenditure , proportion $\phi$ is invested in public capital formation. Hence we ...
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### Economics Question [closed]

The Sons of Knute Social Club is considering the purchase of a portrait of President Knute for their meeting hall. This is a discrete public good. Each of the n = 40 members has an income m = 300 and ...
40 views

### Can we model risk with only probability?

Sorry for the confusion! I am adding an example to see if it helps: For example, consider a gamble A, with payoffs {a,b,c,d}, whose probability of each payoff being realized is equal (so 25% each); ...
164 views

### ARIMA - reason for + MA term

I have 2 questions regarding ARIMA. 1st: How do we get the MA component - the et's (as we want to regress yt on lagged yt and also et and lagged et's)? If I want to regress yt on lagged yt's, I have ...
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### Economic interpretation of Returns to Scale

There are three possible types of returns to scale: increasing returns to scale, constant returns to scale, and diminishing (or decreasing) returns to scale. If output increases by the same ...
899 views

### What makes a company too big to fail?

I have read the too big to fail Wikipedia and as far as I understand, a company is too big to fail (and thus will receive government bail-outs) if it's failure has a significant impact on an important ...
18 views

### When can index funds buy shares of a new stock in the index? [closed]

Indubitably they can't buy too early, or else the ETF wouldn't track the index because that stock isn't in the index yet. I'm befuddled by the conflicting comments on Reddit. realmastodon2. 46 points ...
386 views

### Price elasticity of demand always increases with price?

Is there a closed-form continuous demand function whose price elasticity of demand decreases with the price?
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### Walrasian demand with a twist of Leontief function

A consumer has the utility function $u(x_1; x_2) = \min(x_1; x_2) + 5 \max(x_1; x_2)$. Find its Walrasian demand $x^*(p; w)$. I've tried searching it up when we have two Leontief functions summed ...
36 views

### Monopolies in Large Firms

Consider a situation when, all monopolies and large firms were broken up into a bigger number of small competing firms, the most possible result would be: A) Higher prices in industries which have ...
20 views

### Microeconomics labour work [closed]

There are 100 workers in the country of North Orlendo and 100 workers in the country of South Orlendo. Workers in either country work 50 hours per week and they can spend their time either producing ...
37 views

### Expenditure function

Let $u (x) = \prod_{{i\leq n}}$ $(x_i-m_i)^{a_i}$, where $m_i\geq$0 and $a_i\geq$0, Σ$_{{i\leq n}}a_i=1$ show that the expenditure function $e(p,u)$ is linear in $u$. Based on the definition of the EF,...
96 views

### If protectionist policies hinder economic growth, why do we need border taxes at all?

I understand that free movement of labour and goods are a net positive for economic growth, and protectionist policies, which would make exports and imports harder would not be. But if this is the ...
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### Are there any books on economy of the medieval England?

I would like to learn more about how the medieval economy in the UK worked. Are there any economists that research medieval society in the UK? Are there some good books on this?
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### How do stock index futures help an economy?

It seems that stock index futures affect economic growth, but I don't know how they work. Please can someone explain? Thanks in advance~
43 views

### What would happen in a modern economy if growth plateaus?

According to a Wikipedia article on a United Nations report, The UN Population Division report of 2019 projects world population to continue growing, although at a steadily decreasing rate, and to ...
19 views

### How would a firm increase price in such a scenario?

I have the following question: If a firm with a lower marginal cost wants to increase prices in a homogenous goods industry in which demand is perfectly inelastic and supply is in excess, what should ...
19 views

### Are there any analysis of what is the net benefit of NASA program to US economy?

I am looking for some study that tries to calculate whether the NASA program on a net basis benefits the US economy. The program is very expensive, but it generates lots of patents, research, jobs and ...
12 views

### Macro Economics [closed]

a. Suppose the number of employed people is 20.5 million. The unemployment rate in this economy is 8.8 percent, and the labor force participation rate is 65 percent. i. What is the size of the labor ...
10 views

### Which values to assign to a quantified dummy variable

I am working on a data set from kaggle (https://www.kaggle.com/spscientist/students-performance-in-exams) about how student performance relates to some explanatory variables, such as if the school ...
36 views

### Prove the equation

Let $$x^0=x^*(p^0,w)$$ then $$v(p,px^0)$$ is minimized at $$p=p^0$$ What theorem are we supposed to use in order to solve this, because I am a bit lost. Thanks in advance for all the suggestions/help....
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### Derive utility function from expenditure function [closed]

How can I obtain utility function from expenditure function e(p1,p2,u) = u*min(p1,p2)
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### monopolistic competition in the case of the car industry [closed]

monopolistic competition in the case of the car industry