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

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Anti Piketty Confusing Movement Along Demand Curve with Shift

In Anti-Piketty, the author's claim that the statement "If the supply of any good is insufficient and it's price is too high, then demand for that good should decrease which should lead to a decline ...
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4answers
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+50

Why does supply equal demand?

My question is simple: in theory, why should we expect the total quantity that firms want to sell to be (at least approximately) equal to the total quantity that consumers want to buy? As I ...
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3answers
47 views

modelling disutility from over consumption

In introductory economics courses the concept of marginal utility is illustrated through simple examples like how much benefit one gets from eating another slice of pizza (i.e first slice provides 100 ...
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1answer
25 views

Supply Deman Equilibrium

When in surplus or shortage, in order to achieve equilibrium price must change. I understand that. But what if when in surplus, suppliers choose to instead sell less, but for the same price? Vice ...
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1answer
32 views

Solving differential equation in The Economics of Superstar (by Rosen)

I am currently reading "The Economics of Superstar" written by Rosen (1981). I don't understand one differential equation he used in the paper. The equation is as follows: $$\frac{dp}{dz} = (p+s)/z.$$...
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0answers
20 views

Average And Marginal Productivity Curve

Please why does the Marginal Productivity Curve(MPL) Cross The Average Productivity Curve(APL) at the highest point of APL? And if there is an answer, how do I prove it?
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1answer
40 views

Should publishers of scientific papers such as Elsevier be regulated by the government?

To get a pdf copy of a paper published in Elsevier is quite difficult. You need to pay a high price. Publishers like Elsevier used to have good reasons to charge people a lot: before the invention of ...
3
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1answer
30 views

Pareto efficient allocation and core allocation in 2 person exchange economy with discontinuous utility

I understand that with continuous and strictly increasing utility function we can find Pareto efficient allocations by looking at the allocation that satisfies $MRS_1 = MRS_2$. However, I was not sure ...
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17 views

Is delivery-capability (in economics) a probability?

A dealer with a large, but finite stock counts for 1 year a = the number of all purchase inquiries that reach him this year and b = the number of purchase inquiries that he can deliver on the ...
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15 views

Research community around logistics micro-economic topics?

Is there the equivalent of a Rand Journal of Economics for the topic of logistics, focusing on the micro-economics of productivity gains via automation or disruptive technologies. There is the ...
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1answer
19 views

Effect on Large Company on Redistributing Profit from Shareholder to Employees

Looking over the information in the tour I'm aware this might be too opinion based or require too long answers, so I apologies in advance if this is off topic. In an attempt to keep the question ...
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1answer
22 views

Pareto-optimal allocations in the Edgeworth box

If agent A has utility function $u(x_1, x_2)$ and agent B has utility function $v(x_1, x_2)$, what are the equation(s) that characterize the Pareto-efficient allocation of goods in the Edgeworth box? ...
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1answer
18 views

Price Derivation in a Production Function

Here is a composite goods production function: And here is the price ratio of Ys and Yg, derived from their marginal products: Then the author normalized the price of final goods Y to 1 and somehow ...
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1answer
23 views

Nested CES Production Function

If I have four input factors (a, b, c, b) and I want to construct a nested CES production function such that (a, b) are substitutes, (c, d) are substitutes and [(a, b), (c, d)] are complements, I.e. a,...
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0answers
8 views

Cobb Douglas Production Function Substitutes or Complements?

I see that there is a question similar to mine but it is does not specifically answered. Here is my question: I understand that, in a Production Function, when elasticity of substitution is greater ...
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0answers
17 views

Trying to write a program to show that optimal size of a risk sharing group is finite

The following is a document that details the problem and provides a problem-solving algorithm on page 10 and 11. I am having trouble with step 3 and onward; if you have any suggestions or solutions ...
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0answers
5 views

Effect of FDI barrier removal

What would be the effects on gdp growth of a hypothetical country, if it removed all restrictions on FDI inflow?
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0answers
13 views

Relation between Epstein Zin and Power Utility

I found this graph in Campbell and Viceira 2001 at page 35-36 (https://faculty.fuqua.duke.edu/~charvey/Teaching/BA453_2006/Campbell_Viceira.pdf) which is used to explain the relation between Epstein-...
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0answers
23 views

Query regarding best response curves

Hal Varian intermediate microeconomics ch-29(game application), page-546 to 550, subheading-games of competition. 1) in page 548, to quote the author "what about column? We can perform a similar ...
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Regression on derived consumer preference

I have a data set with some demographics of consumers who bought a product that can be used to imply their preference (beta) using Cobb-Douglas (see comments of original question). I’d like to check ...
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1answer
38 views

Consumer preference and price in the Cobb-Douglas function

I believe I’m using the most basic version of Cobb-Douglas: $U(x,y)=x^\beta * y ^{(1-\beta)}$. The question I have is: in this example would a consumer’s preference ($\beta$) change if the price of ...
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1answer
8 views

Devising a model for inflation for a closed points system

I am working on a project that involves points. The idea is that users will earn points and redeem them for certain rewards. The means via which the users earn are fairly limited (They can attend a ...
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2answers
44 views

What is excess demand/ excess supply?

I've been reading up on Walras' Law and thought I understood it pretty well. However one of my friends asked me point blank what is an example of excess demand or excess supply is and I had some ...
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0answers
26 views

Profit maximization under stochastically independence

Consider a risk-neutral profit-maximizing firm that produces output y from input x using the technology y = f(x), f’(x) > 0 and f’’(x) < 0. It is possible to ob-tain x from two sources: either ...
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0answers
16 views

Optimal auction type or mechanism design for property sale

What is the optimal auction type or mechanism design for the sale of a single plot of land with the following attributes: in a city suitable for building may be developed undivided, or may be ...
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1answer
32 views

MICROECONOMICS: Optimal quantity produced in a Perfect Competition Market

Suppose the Total Cost function of a firm in Perfect Competition is given by: $$C(q) = 450 + 15q + 2q^2$$ The market price is $P = 15$ per unit Determine the optimal quantity produced by ...
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Consumption bundle

An economics grad student went one night to pub-x where beer and whiskeys both cost £1.00, and drank six beers and four whiskeys. The next night (eve of the comps) he went to the pub-y where beer ...
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24 views

Homothetic preferences question

Consider two goods market, preferences are homothetic. What is true about the price elasticity of demand by using Euler law? — I don’t ask for solution. But I don’t understand this question. What ...
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0answers
30 views

Risk-neutral principal question

An employer is hiring a worker to work on his behalf. The worker produces an output whose value is a random variable. The employer writes a contract that pays the worker w(x) if the output is worth x. ...
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1answer
24 views

How does this demand function satisfy the Weak axiom if it doesnt satisfy the necessary and sufficient conditions?

Let $x_k = \frac{w}{\sum{p_l}}$ for $k = 1...L$ be the demand function. This demand function does satisfy the weak axiom and this can be shown simply. The slutsky matrix is an $L \times L$ matrix ...
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0answers
19 views

Determine the range for the amount demanded

A consumer consumes two (and only two) goods A and B. Both goods are ìgoodî in the sense that more of either is strictly better. The consumerís preferences are well-behaved (complete, transitive, ...
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4answers
104 views

What is economics?

It has been disturbing me since the first year of college that the meaning of economic is express too much as it is too less. "Study of scarcity, utilize the limited resources to satisfy unlimited ...
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0answers
59 views

Insurance question: need a brief explanation

Two risk averse people are identical in every way (including wealth, W , amount of loss, L, and utility function, U(W)) except they have different probabilities of loss. Suppose they want to buy ...
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31 views

Duopoly Game - asymmetric info

Question 1: Assume that a firm is a θ-type monopolist that produces a good of quality θ. The firm knows the quality. There is no fixed cost. Quality can be either high (θ = 2) or low (θ = 1). A ...
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1answer
42 views

First Price Auction with Reserve Price

I'm trying to solve the following question: "The seller wants to auction off a single item to two bidders, the valuation of each bidder is an iid draw from a uniform distribution on $[0,1]$ where ...
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0answers
53 views

Signaling questions (separating equilibrium)

Consider two firms Inverse functions: $p(q)=max\{a-q,0\} $ $q$ is total production and a is positive constant. This value of a takes two values ah=2 (high demand) and aL=1 (low demand). Their ...
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0answers
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what is the project monitoring and impact analysis(PMIE)?

what is the project monitoring and impact analysis(PMIE)? Can anyone explain basic features of this?
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1answer
38 views

finding the returns to scale of a production function

Find the returns to scale for he following production function- $(x_1 + 1)^.5 (x_2)^.5$ My attempt, Let $f(x_1,x_2)=(x_1 + 1)^.5 (x_2)^.5$ And $g(x_1,x_2)=(x_1)^.5 (x_2)^.5$ Now, $(x_1 + 1)^.5 (x_2)^....
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1answer
49 views

Walras's Law V.S Say's Law- Is there a difference?

I've been going over the concept of Walras's Law and often references to Say's Law. I've heard and have seen online that they are really the same thing however by looking at the definitions I notice a ...
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2answers
52 views

preference relations

Can anybody give an intuitively explanation for the following problem? Let $\succeq$ be a preference relation on a set X. Define I(x) to be the set of all y ∈ X for which y ∼ x. Show that the ...
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1answer
52 views

Preferences over lotteries

Can anybody give me a hint how to solve the following problem? *One way to construct preferences over lotteries with monetary prizes is by evaluating each lottery L on the basis of two numbers, Ex(L),...
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0answers
30 views

Profit maximizing by monopsonist facing separate labour supply schedules for males and females

Suppose a firm is a monopsonist in the labor market and faces separate labor supply functions for males and female workers. The labor supply function for male workers is given by: $L_m$= $w_m^k$ ...
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1answer
54 views

Market Power in microeconomic theory

What does the term Market Power mean in microeconomic theory
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15 views

Model of sales of a new product

I am looking for any popular model to calculate sales of a new product under the assumption that some goodnesses of the product are given. For example, the novelty $N$ and usefulness $U$ of a new ...
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0answers
31 views

Charging a minimum increment on the second price in online advertising auctions

Many ad servers running GSP auctions tend to charge a $0.01 increment on the second price. I was wondering if there was any theoretical basis for this, or is it just a way for ad servers to make a ...
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2answers
83 views

When does gambling reduce risk?

Suppose that you face risk. It is obvious that taking gambles whose outcomes are negatively correlated with the outcomes of your other gambles can reduce your overall risk ('hedging'). My question, ...
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0answers
53 views

Maximization under two different states of the world [closed]

What I did is the following one but I am not sure at all: Any help will be appreciated. Thank you.
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1answer
135 views

Profit maximization and allocative efficiency result

I completely stuck to the last part of this exercise. I cannot understand how can I determine an allocative efficiency result. Any help will be appreciated. Thank you.
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1answer
83 views

Consumer theory with lump sum fee

Please look at only part ii. I wrote budget constraint $x_1+x_2=10-f$ When I don’t pay fee, my optimal value values${}=(1,1).$ In the case of free disposal, $b_1=b_2=5$ but I consume only $x_1=0$ ...
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1answer
97 views

Stackelberg setup

I am completely confused because I cannot find the leader's best response. I do not know if it is exactly the same as it was a Cournot game. What I did is: Any help will be appreciated a lot. Thank ...