Questions tagged [microeconomics]

Microeconomics is a branch of economics that studies the market behavior of individual actors (usually firms and consumers) and the aggregation of their actions in different institutional frameworks (usually the market).

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Q: Could you guys help to understand?

sw, bw, r and lh are goods. Is that correct to say that the individual were more sensitive to changes relation to prices than in spending(marshallian price) or no? I have this doubt because of the %...
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Microeconomics : I think lumpsump transfer is preferable but I'm not sure,wht will be answer via IC graphical approach? [closed]

(a) Suppose the government subsidizes housing expenditures of low- income families by providing them a rupee-for-rupee subsidy for their expenditure. The Lal family qualifies for this subsidy. They ...
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Labor demand and supply curves in terms of elasticities

I would like to ask for your help to derive some expressions. Let the labor demand curve be described by: $N^D = N^D(W/P, \bar{K}), \quad N^D_{W/P}= \frac{1}{F_{NN}}< 0, \quad N^D_K = -\frac{F_{NK}}...
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How can I express VC function in f(x)?

It is a variable cost graph with economies of scale.
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Imputing # of unemployed from Labor Force Survey

I am working on state-level data, where one state has recently stopped publishing the absolute figures for the number of the unemployed. Instead, it currently only releases U and LFP rates. ...
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Introduction the economics [closed]

firms in perfect competition produce the productively efficient output level in the short run and in the long run. Is it true or false?
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How to distinguish if production costs changes the elasticity of the supply or shifts it?

I have specific doubts about how a factor affects supply elasticity and how it shifts the supply curve. In many cases, the literature shows that some factors affect supply in both ways. For example, a ...
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Can anyone solve this indifference curve question?

Draw the indifference curves for a preference relation which is neither monotonous or strictly convex, yet convex. My solution was to draw a circle but I'm pretty sure that is wrong.
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Is possible that, in a choice structure $(B,C)$, $C(b) = \emptyset$, for some $b \in B$

It is a very simple question but with some implications. I just start reading Mas-Colell and it's not clear for me if it is possible a choice structure, $(B,C(.))$, where $\exists b \in B, C(b)= \...
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The short-run cost curve at the minimum point of the long run average cost curve represents the least cost plant for all levels of output. T/F? [closed]

I have read that the long run average cost curve is tangent to all the short run cost curves in a long run. Does that mean that the lowest point of the long run average cost curve represent the least ...
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Assess the likely impacts on the allocation of resources. (10 marks) [closed]

full question : Assess the likely impacts on the allocation of resources, from drop-out rates of students from low-income households being higher than students from high-income households. (10 marks) ...
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Intuition of Shephard's Lemma in Reverse

I am not sure how to word this question. I understand the envelop theorem pretty well and as a result Shepard's Lemma. The proof is relatively straightforward. I am getting stuck on the intuition ...
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A world only with two contries (net exporter)

We assume that we have two and only two contries: Albania and Bulgaria. There is complete free trade between the two countries. The aggregate investments in Albania are given by: $$I^A=A-ar$$ where $A,...
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guys I need help with this question [closed]

I need help guys please if anybody can help
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Production efficiency under monopoly

Sorry, I forgot to mention that in this case, the demand curve is above the LAC at the point where MR = MC. In other words, the price is set higher than the long-run average cost. I am trying to wrap ...
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Interpretation of market condition given by relation between elasticities

The total market demand is given by the sum of the two destinations ($e$ and $f$) given to the product. Given these conditions: Demand: $d(p) = e(p) + f(p)$ where: $d(p) > 0$, $d'(p) \leq 0$; $e(...
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Fehr-Schmidt, Ultimatum game, Subgame-Perfect Nash Equilibrium

I'm studying the different variations of the ultimatum games. I've spent some time on this following game: Assume now that each player does not only care about the amount of money she receives, but ...
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Exchange economy find core

Find Pareto optimal allocations and the core for the following economies Consider an exchange economy with two agents and two goods. Let consumption sets are the nonnegative orthant. Agent 1’s utility ...
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Pareto Improvement with Monopolies

This may be one of the more 'elementary' questions on this site.. But I really can't wrap my head around it and a search on the web hasn't yielded much. Given that Pareto efficiency is defined as when ...
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2answers
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Struggling with self-learning economics through textbook readings

I am trying to self-learn introductory microeconomics by following a textbook, Microeconomics by Christopher T.S. Ragan. I am not currently enrolled in a course, I am just self-learning in preparation ...
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Show the relationship between hicksian and slutsky demand theory [closed]

Can I have the information on relationship between hicks demand and slutsky demand
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Maximize marginal products

Say a firm is facing a budget line as stated below:($K$ stands for capital and $L$ stands for labor) $$200K + 100L = 1000$$ Under this circumstance, a rational firm will look for ways to maximize its ...
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efficient production plan [closed]

Microeconomic Analysis.(Varian) :: A production plan $y$ in $Y$ is (technologically) efficient if there is no $y'$ in $Y$ such that $y'$ $\ge$ $y$ and $y'$ $\neq$ $y$; that is, a production plan is ...
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Endogeneity in demand estimation using demand systems estimations

Assume I have quantities and prices for J products across M markets in T periods. I want to estimate their elasticities. I construct J regressions of this type: $$\log \left(q_{j m t}\right)=\alpha_{t}...
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Effect of a quantity tax in perfectly competitive market (Intermediate microeconomics)

Been stuck on this past paper question for quite some time. Doing my head in and going around in circles trying lots of different approaches... Perfectly competitive market. $C(𝑦) = (0.5)y^2 + 40𝑦 + ...
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Utility function for introductory microeconomics

What are the utility functions standardly used in introductory microeconomics courses. My own list would include Perfect substitutes: $U(x,y) = ax+by$ Perfect complements: $U(x,y) = \min(ax,by)$ Cobb ...
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Maximum price a consumer is willing to offer?

In microeconomics it is standard to maximize utility subject to a constraint. For this problem income and prices are normally and the solution is the Marshall which plugged into direct utility ...
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Cost function from an easy CES production function

How can I find the cost function c(w,p) given that the production is $f(x) = x_1+x_2$ I did Lagrangien's method but my problem is that I got no $x_1$ and no $x_2$ after taking the derivate. So I would ...
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What links can be made between the marginal productivities of the factors of production and the costs of production [closed]

What links can be made between the marginal productivities of the factors of production and the costs of production
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How to interpret risk premium

I do not understand the notion risk premium. Let us suppose that John goes to the city by car, but he is thinking about not paying for the parking. If he is caught in the act he must pay the fine. How ...
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Supermarket selling seasonal items below cost?

In a British supermarket, I saw the prices of Christmas chocolate gift boxes being cut dramatically (£1.50 to £0.15, and £7.50 to £0.22). I don't quite understand this behaviour, where the chocolate ...
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graph of dependent income

I would need help with the following problem about consumer theory. Let us say that $X$ is the amount of days at the sea and $Y$ is the amount of days on the cottage. We have some utility function $u(...
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demand curve shift in a monopolistic competitive market

As more firms enter the market, the quantity demanded at a given price level will thus decline. Therefore, the perceived demand curve for any individual firm will continue to shift leftward until the ...
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1answer
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Principal-Agent Problem with Two Agents

Consider the following principal-agent problem. You are a manager in charge of two workers, indexed with $i=1,2$. Each worker is asked to perform a particular task, and each can either work hard at ...
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Solved applied econmics question. Problem is the value of TVC, TC, AVC, ATC, & AFC are all negative. Should I ignore negative value?

Disclaimer: This is not a "Do my homework" type of question. Instead, this is, "I'm confused whether what I did is right or wrong?" type of question. If I ignore negative signs in ...
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CobbDouglas: Constant marginal costs and constant returns to scale

A company has a production function: $$y=x_1^{\alpha}x_2^{1-\alpha}$$ where $0<\alpha<1$. Factor input 1 costs $w_1> 0$ and factor input 2 costs $w_2> 0$. The company wants to minimize its ...
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1answer
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Long-term equilibrium price inelastic?

I have doubts about some economic interpretation: Why is the long-term equilibrium price inelastic? But in the short run, the equilibrium price is not necessarily inelastic. What is the economic ...
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Educating workers (micro model)

Would someone be able to check my solutions to this basic problem? This is a practice test with no solutions provided, and I have no idea if I am going in the right direction. Problem: https://ibb.co/...
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1answer
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Formalizing unorganized Sector

This is a fairly basic question. What are the real benefits of formalizing the unorganized sector? What does integrating these into the organized sector achieve other than maybe increased tax revenue ...
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How many Nash equilibria are there in the above game?

5 people are eyewitnesses to a criminal incident. Each one of them wants the police to get informed but they prefer a third person to give the information. Suppose k is one of the 5 people. If the ...
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Cost function from CES production function

How can I find the cost function $c(w,p)$ given that the production is $$ f(x)=(x_1^p + x_2^p)^{1/p} \ \ for\ \ 0<p <1 $$ I tried to solve it and found that $$TC(y) = \left\{ \begin{...
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1answer
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How to find the cost function for perfect complements [closed]

Imagine I got a production function like it : $$ \min\{x_1, x_2\} $$ How can I find the cost function?
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How to Determine some profit,cost offer function about a function of production given [closed]

I try to train myself with some exercices about economy. I have an exam in januar and I have to train myself. So I create some exercice, but I see that I can't do a simple question like it : Imagine ...
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How to create an economic model? What are the step for this? [duplicate]

How to create an economic model? What are the step for this? Is it need a real data for this? Or generating a data is acceptable? If possible, I want to know the step by step for creating a ...
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1answer
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Accounting profit in macroeconomics as compared to microeconomics

In Macroeconomics (2019) on p.103, it is argued that the reason there exists profit in an economy is that most firms own rather than rent capital. Thus: But, Microeconomics assumes a different ...
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1answer
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Game with an equilibrium in pure, but none in mixed strategies?

I came across the following game: The question is to find potential equilibria in mixed and pure strategies. The solution says that there is an equilibrium in pure strategies (B,N), but none in mixed ...
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Counter example for strong and weak Pareto optimality

We know that strong Pareto efficient is equivalent to weak Pareto efficient if we have continuous and strongly monotone preferences. Please give me an example which we don’t have continuous and ...
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Properties on conditional demand correspondence from the textbook of Mas-Colell et al

I have a question on the properties of conditional demand correspondence Let $z(w,q)$ be the conditional factor demand correspondence, i.e. the solution of the cost minimization problem \begin{align} \...
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Second welfare theorem and non-continuous preferences

Are there any monotonic and strictly convex preferences that are not continuous but the second welfare theorem does not hold for them?
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setting of Lagrangian function

Consider a simple consumer's problem: Max $u(X)$ s.t. $\sum_i^l p_i x_i\leq \sum_i^l p_i w_i$ $w$ is initial endowment. We can set the Lagrangian function to solve this problem. $L=u(X)+\lambda ( \...

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