# 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).

2,126 questions
Filter by
Sorted by
Tagged with
2answers
1k views

1answer
122 views

### Minimization of costs combination of factors of production

Given the production function $D(x,y,z)=\min\{2x, \left( 2y+4z\right)\}$, and knowing that P-price $P_x=30,P_y=20,P_z=5$ and volume of production $D=200$. How much of x,y and z is needed to minimize ...
1answer
142 views

### Why do all apartment complexes in Albuquerque have pools?

Apartment builders have a constrained optimization problem whereby they balance building different amenities to attract tenants with varying preferences. Recently when searching for apartments I ...
1answer
416 views

### Budget constraint hyperplanes

This question relates to a specific paper by Eric Budish, published in 2011 in JPE, but I've tried to put all relevant information in this question. On page 1072, he defines budget constraint ...
1answer
68 views

### Substitutive or supportive factors of production

Given the function: $y=A K^\alpha L^\beta, A,\alpha,\beta >0$ $y=aK+bL^{0.5}, a,b>0$ Decide whether capital and labour are substitute or supportive factors of production. How to solve this ...
1answer
522 views

### Find Change in output from marginal products of labor/capital

A firm produces 231 doohickeys with 8.4 units of labour and 22.1 units of capital. the marginal product of labour is 18, the marginal product of capital is 20. Approximately how many doohickeys will ...
1answer
131 views

0answers
136 views

### Proof of Proposition 1.4 from Microfoundations I by Kreps

Regardless of the size of X (set of all possible objects), if a preference relation which is complete and transitive is defined on it, then the corresponding choice function generated by it will ...
1answer
77 views

### Do assets without rental income streams appreciate relative to assets with rental income streams?

In his book "The Armchair Economist", economist Steve Landsburg critiques an op-ed concerning the relative value of stocks and real estate: James K. Glassman wrote a piece in The New Republic to ...
1answer
3k views

### Why is the social value curve NOT the supply curve shifted downwards?

Abbreviate 'Social Value' as SV. In some other resources such as this, the SV curve is known as the Social Marginal Benefit curve. The following quotes explain [1.] why the SV curve is the demand ...
1answer
937 views

### Intuitively, why is Profit = (Price $-$ Average Cost) $\times$ Quantity?

Sources: p 289, Principles of Microeconomics (7 Ed, 2014) by N G Mankiw p 259, Modern Principles of Economics (2 ed, 2011) by Tyler Cowen, Alex Tabarrok Definitions: Profit $:=$ Total Revenue $−$ ...
1answer
65 views

### demand impact on shares price

Knowing that share prices are determined by the forces of supply and demand, other factors can also play a role in this but lets consider the fact that prices are only based on supply and demand.In ...
0answers
781 views

### Modern theory of integrability of demand?

I am aware of Hurwickz Uzawa work in integability, neatly summarized by Border http://people.hss.caltech.edu/~kcb/Notes/Demand4-Integrability.pdf I am wondering if there is any modern treatment of the ...
2answers
2k views

### Consumer Surplus question

The demand for rail travel is $Q^d = 600 - 2P$ where quantity is thousands of train journeys per quarter and $P$ is in £ per journey. How much would the consumer surplus change if rising cost of ...
2answers
1k views

2answers
12k views

### The relationship between the expenditure function and many others!

I dont understand the relationships between Hicksian demand, walrasian demand (marshallian), the expenditure function and the indirect utility function (including the value function V(b)). I have ...
1answer
592 views

### Effect of specific tax on demand and supply

There are intersecting supply and demand curves. A tax is levied on suppliers. Say the tax is a fixed tax (for example, VAT) and not an ad valorem tax. Why can we not just move along the demand ...
1answer
2k views

### Walrasian Equilibrium under Leontief Preferences

There are two people in the economy, A and B. Both have the utility function: U=min{x,y}. A has an initial endowment of (x,y)=(50,100) and B has (x,y)=(100,50). I know how to draw the Edgeworth box ...
1answer
524 views

### Moral Hazard or Adverse Selection?

I pay the doctor before he conducts the surgery. Can anyone explain to me whether this statement shows moral hazard or adverse selection?
2answers
10k views

2answers
717 views

1answer
94 views

### Proving government expenditure crowds out private consumption [closed]

Please help as I am not able to solve either parts.