# 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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### How do I calculate total utility under discounted utility framework

Suppose we are given an instantaneous utility function and discounted rate with budget constraint. Using the exponentially discounted utility function, we can find the optimal consumption stream of a ...
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### Consumer surplus at equilibrium with WTP table

I should be grateful for a breakdown of the steps I should take into account. The answer is (D).
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### Is the relation $\mathcal{R}=\{(1,2),(2,3),(1,3)\}$ on $X=\{1,2,3\}$ complete?

Is the relation $\mathcal{R}=\{(1,2),(2,3),(1,3)\}$ on $X=\{1,2,3\}$ complete? By looking at the completeness definition in preference: Definition 1.1(c), this is same as the connected relation in the ...
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### Estimation of learning model with finite horizon forward-looking individuals

I am stuck with the estimation of learning model where individuals are forward-looking in a finite horizon. Specially, a user is watching a TV program containing many episodes, and he doesn't know the ...
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### Reference for monotonicity: $x\geq y\implies x\succsim y$ and $x>y\implies x\succ y$

I've seen this definition for monotonicity many times on different papers and on this site: $x\geq y\implies x\succsim y$ and $x>>y\implies x\succ y$. However, what I read on MWG's ...
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1 vote
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### Question About Non-Degenerated Constraint Qualification (NDCQ)

I am studying constrained optimization using Mathematics for Economists by Simon and Blume, and I have some difficulties understanding the Non-Degenerated Constraint Qualification (NDCQ). I would like ...
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### Frameworks and models in economics

A framework is not a model of a specific system, but a way of formulating and studying a variety of systems. Classical mechanics, quantum mechanics and statistical mechanics are all really frameworks. ...
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### What would be a truly universal currency?

I have no clue where to ask this, so here it goes... With the advent of LK99 and its potential uses in recent solutions for modified Alcubierre drive fields, it pushes me to wonder: What if humanity ...
33 views

### Am I calculating the Gini coefficient correctly?

I calculated the Gini coefficient through a statistical program (MATLAB), and it came out much larger than I expected. I think I got the Gini coefficient formula right, but I don't know where I went ...
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### tax imposition on supply and demand curve

I've just started learning Economics a few days ago. There's a question here that I can't understand. If a tax is imposed on consumers, the demand curve should shift to the left, and a new market ...
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### Question About Implicit Function Theorem and Comparative Statics - Mathematics for Economists by Simon and Blume Chapter 15 Exercise 32

I am studying Implicit Function Theorem and its application on comparative statics using Mathematics for Economists by Simon and Blume. Here is the question: Consider a pure exchange economy with two ...
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### How does equilibrium work?

It is well known that in a perfectly competitive market, any price would be pushed to equilibrium. Say for instance, that the price was higher than the equilibrium price than a firm lacking demand for ...
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### Is there a labor vs leisure model with work experience?

I find the labor-leisure model with utility functions interesting, but I find it lacks the factor of work experience, which is very important in the real life labor market. This is a reason people why ...
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### What is max here, and how did they derive the first order condition from it?

Hello. Someone sent this on a discord server that I am on, and I couldn't make heads or tails of this. I found the book it is from on studocu; solutions to Cabral's Industrial Organisations, 2nd Ed. ...
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### Question About Non-Discriminating Monopolist - Mathematics for Economists by Simon and Blume Chapter 17 Exercise 7

I am working on Mathematics for Economists by Simon and Blume Exercise 17.7. I know there is an Answers Pamphlet. However, the solution to this question does not make any sense to me. It seems that ...
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### "Truck Transportation of Freight" would include tanker trucks that transport NGLs, correct? I'm looking at the Producer Price Index of transport

The producer price index I am referring to: enter image description here There are other categories as well, but I'm concerned specifically with "Truck Transportation of Freight": enter ...
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### What are the real world consequences of diminishing marginal utility?

I've just started a microeconomics course and the instructor has talked about diminishing marginal utility. I understand what it is, but I'm struggling to understand why it matters. What are the real ...
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### Signaling game (beer and quiche) and consistent beliefs

I am confused why the top left node has numerator (9/10x1/9) instead of (1/10x1/9) since this should be the probability of reaching this node given the strategies? Same with upper right node, why is ...
1 vote
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### Optimality of the free market and game-theoretic arguments

I recently heard an informal argument that went something like this: Through individual self-interest and freedom of production and consumption, the best interest of society, as a whole, are ...
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### A question on Intermediate Microeconomics: A Modern Approach 9ed by Hal Varian, Section 14.6 Quasilinear Utility

In this section, there are two parts which I do not quite understand. The first one is In general the price at which a consumer is willing to purchase some amount of good 1 will depend on how much ...
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### Question about table in Credit Lines as Insurance: Evidence from Bangladesh

I am reading a paper for a seminar, titled "Credit Lines as Insurance: Evidence from Bangladesh" authored by Gregory Lane. In there, he describes part of his result refering to a table with ...
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### labor leisure model, quasilinear preferences

There is a quasilinear utility function $u= (1-t)wl - p(l)$, where $l$ is labor supply. I don't quite understand what happens, if the budget changes (due to $w$ or $t$) since it is quasilinear. Does ...
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### Taxation and Labour Supply in the short-term

Can someone help me to explain this graph and who has tax incidence more?? In which, the vertical axis means wage per hour and the horizontal axis means the number of labor hours supplied per year. ...
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### Reductionism vs emergentism in economics

Is economics reductionism or emergentism ?Reductionism is the idea that knowledge at a higher level can be deduced from the entities and their interaction at a lower level.Emergentism rejects ...
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### Sufficient conditions for connectedness of indifference sets of a preference relation defined on a compact and convex set only

Let $\succsim$ a complete, reflexive and transitive binary relation defined on $X$, a non-degenerated (i.e not identical to a singleton) convex compact subset of $\mathbb{R}^n_{++}$ (the set of n-...
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### Present Value of flow of profits with constant interest rate

I'm studying Schumpeterian Models of Quality Ladders from the Barro's book (Ch.7). I have problems in getting the derivation of equation $(7.13)$ as follows The basic idea of those models is: when an ...
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### Elasticity computations and revenue

I would have appreciated some help in this issue. I have a demand schedule that looks like this ...
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### Why is a patent considered as a non-rival good?

I mean, if a company received a patent for a particular invention that they did, others can't use the same patent. They can try to imitate the company and eventually receive a patent for their ...
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### Why is the gradient of the expenditure function equal to the hicksian vector?

I'm reading MWG Microeconomic Theory, and I'm stuck on why the gradient of the expenditure function equals the hicksian vector at a point P. I'm trying to understand it from the duality perspective. I ...
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### How can I test whether factors of production are actually paid their marginal revenue product, or more or less?

How would I go about testing econometrically whether each factor of production is actually paid its marginal revenue product in an industry over time, or is paid more or less than that amount? Please ...
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