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).

Filter by
Sorted by
Tagged with
1
vote
0answers
31 views

Best companion for Mas-Colell Microeconomic Theory textbook

What are the best sources to accompany MasColell Microeconomic Theory textbook in 1st year of MA in economics? I mean any sources - textbooks, videos, websites, book companions, etc. And I mean easy ...
1
vote
1answer
15 views

Can indifference curves slope up and to the right when both goods are inferior goods?

Just a general question related to Micro. I always thought they sloped down to the right. Thanks!
1
vote
0answers
11 views

unit iso-quant curve and unit iso-value line

This question is about international trade theory. For the labor L and capital K, I know the theory of iso-quant and iso-cost. The price will be determined where iso-cost line touches iso-quant curve. ...
-2
votes
1answer
30 views

mortgage rate in 2008

if banks and finanfial entity paniced, which cause people to stop lending which leads to higher interest rate, how did the mortage rate stayed the same in 2008? it barely dropped. It's kind of ...
-1
votes
1answer
43 views

What may the alpha mean in the context of indifference curves? How to solve such questions? [closed]

The question is as follows: A consumer has a budget of 3000 units. He uses it to buy 2 goods: bread and cheese. Cheese costs 30 units/kg, and bread costs 3units/kg. The indifference curve is ...
-2
votes
0answers
20 views

Question involving Engel's curve's slope, substitution, and income effects

The question is as follows: The absolute value of the substitution and income effects for the change of price of good X is equal to 3, and 14. The Engel's curve for good X has a positive slope. ...
-1
votes
0answers
16 views

What's the formula for calculating the Marginal Rate of Substition using Total Utility function, total utility, quantities of both X, and Y?

The question is as follows: If the total utility function of two goods, X, and Y, is: TU = f(X,Y) = sqrt(XY), total utility is equal to 25, and X = 5, then what must the Y be? What's the Marginal Rate ...
1
vote
1answer
57 views

What is the equilibrium price in this case?

From the Review Questions to Chapter 1: The Market in Hal Varian's Intermediate Microeconomics with Calculus, 9th ed.: Suppose that there are 25 people who had a reservation price of $\\\$500$, and ...
1
vote
1answer
40 views

How do you formulate a distance constrain and a budget constrain?

Everybody knows about budget constraints and how they are represented: but what if I want to represent a distance constrain from the shop you buy the goods? How can I build that?
0
votes
0answers
23 views

how can i know wether its inferior or normal good? I cant determine elasticity with this? What am i missing here?

Really just need to make sense out of elastisities and how to determine mathematecally if a good is normal or inferior. I have determined by X1 which is in this format m/p1 - p1/p2, that i just take ...
4
votes
2answers
114 views

Does returns to scale always lead to economies of scale?

I can tell the difference between returns to scale and economies of scale, but then I still don't know if returns to scale ALWAYS leads to economies of scale? Please could you help me?
2
votes
2answers
135 views

When do prices not exist?

Often we employ the use of the separating hyperplane theorem to prove existence of price vectors, when discussing infinite economies this proof is substituted for proving existence of linear ...
0
votes
0answers
20 views

Convexity/Uniqueness Marshallian demand Cobb Douglas case

Hi guys I have been asked to prove the 3 properties od the Walrasian/Marshallian demand function in the case of a Cobb-Douglas utility function.However, I am not sure how to prove that if the ...
1
vote
0answers
17 views

Diminishing MRTS Range, Follow Up Question

I have a directly related question to this thread (Diminishing MRTS range). The production function in the example is defined as $f(K,L) = 600K^2l^2-K^3L^3$ and it is easy to show that MRTS = $-MPL \...
4
votes
3answers
528 views

Derivative of definite integrals - how did MWG arrived at this result? Microeconomics

For a wage as a function of profit: $w(\pi)$ and profit $\pi \in [\pi_{min},\pi_{max}]$, the owner of a company sets the minimum wage to satisfy the following condition: obs $e = \{e_l, e_h\}$ but in ...
0
votes
1answer
27 views

Is whatever they calculated a valid “demand elasticity”?

https://medium.com/@kwrdarisipudi/demand-elasticity-of-iphones-1e3a7bbb9eac They are saying iPhone demand is less responsive to price over time, but I disagree. Income shifts the demand curve. Higher ...
0
votes
0answers
21 views

Additively Separable Utility Function - Normal Good [closed]

Considering the additively separable utility function, U(x1,...,xn)=U(x1)+...+U(xn), I have to show the following: a) At most one good can exhibit increasing marginal utility and in that case (i) that ...
0
votes
1answer
26 views

Neutral good and quasi linear

if my good y is neutral and x is essential. My indifference curves look like vertical, but I want to ask that How does my utility function look like and can I say that this is quasi linear because mrs ...
2
votes
2answers
55 views

What does it mean if the controls in my IV model are correlated with my instrument?

I am seeking to understand what it means for my 2SLS IV model if my controls are correlated with my instrument (such that when I add additional controls to my model that are positively correlated with ...
2
votes
1answer
120 views

Could price floors improve worker safety in the meat cutting industry?

Could price floors improve worker safety in the meat cutting industry? My question is inspired by the Future Perfect podcast https://www.vox.com/future-perfect/21502225/chicken-meatpacking-plant-...
3
votes
1answer
27 views

What happened to the Zimbabwe cash dollar after the introduction of Dollarization?

Let's say, before dollarization, I owned 1 million Zimbabwean dollars in cash and the next day dollarization went into effect. So in dollarization, the current Zimbabwean dollars will be invalid and ...
1
vote
1answer
34 views

Numbers of right and left gloves Question?

I assumed that numbers of right gloves at the horizontal axis and numbers of left gloves at the vertical axis. Therefore, two goods are essential and indifference curves are L-shaped. However, I want ...
2
votes
1answer
50 views

HARA preferences details

I am searching for some exntensive details about HARA preferences. Where could I find some extensive details for HARA preferences? Something like a textbook or notes
1
vote
0answers
35 views

How is equilibrium reached in CAPM such that the tangency portfolio = market portfolio?

From my research online, when learning CAPM with $n$ risky assets and a risk free asset with return $r_f$, I always see the conclusion that in equilibrium, the market portfolio = tangency portfolio ...
-3
votes
0answers
27 views

Question about Static Game with 3 firms [closed]

I need an answer to the following question. I can't quite get the approach to answer it using a cournot competition model. Consider a static price competition game of three firms; each owns a product. ...
4
votes
2answers
96 views

What is the point of considering only pure strategies in a game? How could you restrict people from thinking about mixed strategy?

In an experimental setting, how could you effectively incentivize the subjects to not to adopt mixed strategy? I would like to re-emphasize that the question in concern is "how to prevent people ...
0
votes
1answer
49 views

Could lexicographic preferences on N^2 be represented by a utility function u: $N^2$ to $Z$?

I got this question on a homework: Could lexicographic preferences on $N^2$ be represented by a utility function u: $N^2$ to $Z$? I've heard countless times that lexicographic preferences can't be ...
1
vote
1answer
18 views

What does increase or decrease in marginal utility mean in terms of quantity demanded?

According to the definition of marginal utility " it is the utility or satisfaction derived from the consumption of an additional unit of any commodity." So, the question is what does ...
2
votes
0answers
34 views

What is the observable definition of “preference” by Frisch?

To make things weird, although Frisch was fully aware of the importance of random distribution in economics relations, he never mention the randomness in binary preference relations! How to define ...
2
votes
2answers
71 views

Are prices part of total factor productivity?

I am trying to understand how production is related to income/profit and where do prices enter. Suppose there is a single firm with a Cobb-Douglas production technology: $$Y=AK^{\alpha}L^{\beta}$$ ...
0
votes
0answers
28 views

Mixed Nash Equilibrium with missing info [closed]

So I've come across this problem in Watson's book: Suppose you know the following about a particular two-player game: S1 = {A, B, C}, S2 = {X, Y, Z}, u1(A, X) = 6, u1(A, Y) = 0, and u1(A, Z) = 0. In ...
2
votes
1answer
53 views

Can Quasi-Linear functions be monotonic?

I want to ask that Can Quasi-Linear utility functions satisfy the more is better (monotonicity) assumption?
0
votes
0answers
26 views

What are the mathematical prerequisites to understand Whinston and Green's “Microeconomic Thoery”?

I've completed my under graduation in economics where I used micro books like Nicholson and Snyder's Microeconomic Theory and Hal Varian's Intermediate Microeconomics. I am comfortable with topics ...
3
votes
1answer
258 views

Is it true that if marginal cost is constant, then average variable cost is also constant and equals marginal cost?

I'm inclined to think yes because marginal cost only depends on variable cost (fixed costs don't matter), but I'm not 100% certain. Basically, my thought process is that marginal cost of producing one ...
2
votes
1answer
171 views

Can the Certainty Equivalent be negative?

I am questioning if the CE of a lottery can be negative? For me it doesn't make much sense by definition. I encountered this problem on the following exercise: Imagine a case where we have a lottery(...
2
votes
3answers
126 views

If I shred a $20 bill, is society poorer? What is the effect on the real economy?

If the answer is yes, society is poorer, then the converse must hold true: that the government could make us all wealthier by simply printing money. However, a collapse in the money supply must have ...
0
votes
1answer
19 views

why does income of executives level out in the long term after tax increases?

Marginal Revolution University has the following question in its Elasticity unit: In 1993, then President Clinton passed a law raising income taxes. This tax hike was fully expected: He campaigned on ...
2
votes
0answers
35 views

Show mathematically that in a competitive market, a price-taking firm has a zero profit. Also, justify the assumption that there is only one firm

Consider a firm that has a production function given by $F(x)$, where $x \in \mathbb{R}^n_+$. Assume that the function $F$ is strictly increasing in each argument, concave, twice continuously ...
2
votes
1answer
69 views

How was the Cobb Douglas function derived?

In economics and econometrics, the Cobb–Douglas production function is a particular functional form of the production function, widely used to represent the technological relationship between the ...
5
votes
0answers
52 views

Why do two-sided marketplaces often charge both sides of the transaction?

Why do marketplace apps often charge both sides of the transaction, when charging one side could raise as much (or more) revenue and be simpler? i.e. if the marketplace knows which side of the market ...
2
votes
1answer
32 views

Measuring income effect before knowing substitution effect

Suppose on the x axis we have shelter and on the y axis we have composite goods. Now, if the price of shelter increases, the optimal bundle changes from point A to point D. Standard textbook tells me ...
3
votes
2answers
53 views

In a game with alternating moves and complete information, the Nash equilibrium cannot be a non-trivial mixed equilibrium?

Where I can find a simple proof for this fact? For example, a trivial bimatrix game with alternating move has the following payoff matrix: \begin{array}{|c|c|c|} \hline & 1 & 2 \\ \hline U &...
-5
votes
1answer
92 views

Does people dying boost gdp?

When someone dies of coronavirus, all their property must be resold, and this generates an enormous amount of secondary retail activity. Does people dying boost GDP in the short run?
0
votes
1answer
93 views

Which mathematics are required for fully understanding the theories of the firm?

When I say "theories of the firm", I'm referring, in particular, to the theories exposed in the next works: 1) Transaction Cost Economics exposed in "Transaction Cost Economics" by ...
0
votes
2answers
49 views

indifference curve

Suppose my preferences are such that I like more of both goods, but only up to a point. After I have 5 units of both goods, that’s as good as it gets, and I’m indifferent if I get more. how do u draw ...
-1
votes
1answer
41 views

Comparing utility functions [closed]

I'm doing an econ course after not having any math or micro for a few years, now I'm totally missing the basics again. I'm wondering how to show that utility functions are an equivalent to each other: ...
4
votes
1answer
55 views

Utility representation of single peaked preferences

Is it true that a single-peaked preference (with the peak at some finite point) over the set of real numbers, always has a utility representation ?? If yes, can you please hint towards the proof or ...
0
votes
0answers
22 views

Violation of the transitivity axiom [duplicate]

I'm struggling to think of a way to violate the transitivity axiom. I was thinking about the following scenario: Let's say that you're voting on three different choices, A, B and C. If you pit A vs. B,...
1
vote
1answer
26 views

Strictly increasing but not convex preferences

Is it possible to have preferences that is strictly increasing but not convex? Will perfect substitutes indifference curves show strictly increasing but not convex preferences? I am confused, as won't ...
0
votes
0answers
44 views

Binary relation on the set $X = \{v, w, x, y , z\}$ that is asymmetric and transitive but not negatively transitive

So I am trying to find a binary relation on the set $X = \{v, w, x, y, z\}$ that is asymmetric and transitive but not negatively transitive, and is quite tricky. Will $R = (v, w)$ be asymmetric and ...

1
2 3 4 5
39