# 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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### What is an opportunity cost?

Mankiw's definition and explanation of opportunity cost here is confusing. Since when have explicit costs become part of opportunity cost? Here is what the guide says: The concept of opportunity ...
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### If the government introduces import quota will prices change for imported goods

I am currently going through an introductory course to microeconomics. We are discussing how government interventions result in inefficiencies and dead-weight losses. One of the questions in concern ...
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### Cobb Douglas, Budget Line, Demand function question

use the general form of the Cobb Douglas utility function $U(x,y)= (x^a)(y^b)$ and the budget constraint in the form $B=p_{x}X + p_{y}Y$ to find the demand functions for good x and good y. Is this ...
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### Production technology of $y=2x$

I have a given product $y$ that is produced by the input $x$ in the following relation: $2x=y$. In our example, we are given the unit price of $x$ is $16$. Find the unit cost of $y$. The answer is $8$....
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### Calculating equilibrium in a cobb-douglas long run, perfect competition scenario

Supposed there are a fixed number of 1000 identical firms in a PC industry, with each producing the same fraction with the same production function $$q_{i} = \sqrt{K \cdot L}$$ And market demand is ...
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### Representing preference orderings over a finite set of outcomes by two payoffs

I have read the following statement and I am having difficulty understanding the second part: Any set of preference orderings over a finite set of outcomes can be represented either by ...
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### Mathematical framework for modelling the relationship between price and sales of a product

In my job as a data scientist, I am required to model the relationship between the price of a product and the sales or number of unit sold. I am trying to build a simplistic model, the assumptions of ...
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### How to deal with misspecification of models in Macroeconomics?

I'm wondering what methods are used in economics, specially in macro, to deal with model misspecification. I've already searched the web, but I may be missing some methods. Therefore, I ask you for ...
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### Direct revelation mechanism's sets of strategies and types

Mas-Colell, Whinston and Green in Microeconomic Theory describe the direct revelation mechanism as it follows: The employed notation is the following: $θ_i$: Player i's type $Θ_i$: Set of types for ...
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### Are marginal utilities or utilities compared?

Consider decision making in an economic model. Suppose that there is some utility and it is a function of consumption and leisure where leisure is full-time work, part-time work, or full-time ...
In pure exchange GE models, a typical goods market clearing condition for good $n$ looks like: $$\sum\limits_{i=1}^Ic_n^i=\sum\limits_{i=1}^Ie_n^i.$$ Consider a model with production where firms can ...