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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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506 views

Pure exchange economy with free and non-free disposal

Question is as follows: My answers are (I) Let k is constant utility level Then $$k=\sqrt{x_A^1x_A^2}$$ $$k^2/x_A^1=x_A^2$$ The first derivative is negative. So the indifference curve is ...
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969 views

Utility function used to indicate bliss point

How does one create a utility function to indicate existence of a bliss point? what do the goods marshillian demands look like in such a situation?
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Is the study of the volunteer sector inappropriate for a labour economist?

In the basics of labour economics the driving factor for increase in labour supply (for the workers in a given market) is increase in wages. The volunteer sector consists of general and skilled ...
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Kuhn Tucker optimization problem and game theory [duplicate]

Consider a game with two players, where each player i= 1 ,2 has preferences $u_i$= $s_i^a$$c_i^{1-a}$, where c_i is the consumption and $s_i$ is social interaction. $s_i$ is given by : $s_i$ = $t_i$ + ...
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1k views

Optimal production level for a typical firm in long-run

Assuming all firms have identical cost functions. Now suppose there is an increasing shift in the demand curve. As we all know that for increasing costs case, both average costs (AC) and marginal ...
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1answer
293 views

market equilibrium quantity $\ne$ firm profit maximising quantity?

Consider a perfectly competitive market with equilibrium price $P_{eq}$ and quantity $Q_{eq}$ and firm with profit maximising quantity $Q_f$ as illustrated below: I guess any firm in the market would ...
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1answer
3k views

Income and substitution effect for perfect substitutes

I was recently asked about what the income and substitution effects are for perfect substitutes are. Given the rather peicewise nature of the demands for each good in a utility function considering ...
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1answer
96 views

How does demand-supply equilibrium interact with profit maximisation?

My understanding of supply and demand is that at higher prices sellers are more willing to supply and buyers will demand less, and the total transaction volume will be supply or demand, whichever is ...
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Production function involving profit maximisation

​Hi, I don't get how the answer of d is deduced in this question because I don't think I made any mistakes in my calculation and have also used all the information given. After knowing L is 800, I ...
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5answers
131 views

Which measure to check in analysis (p-values or $R^2$)?

In an analysis e.g. OLS regression which measure would you look at? $R^2$, $adjusted-R^2$ or $p-value$? How would you consider a regression with p-values >0.15 but with an $R^2$ of 40%? In general ...
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326 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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Question on oligopoly.

Consider an oligopoly between two identical firms producing a homogenous good with constant marginal cost where firms face linear market demand. $B_i(q_j)$ denotes firm i’s best response given the ...