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).

1,542 questions
Filter by
Sorted by
Tagged with
452 views

Homothetic function versus straight Engle curve

Homothetic functions can be defined as follow (Green, 1964, p.49): If two figures A and B are "homothetic", or "similarly placed" with reference to a point P [for example, the origin], then for any ...
139 views

What are some applications of Akerlof's 'lemons' in goods and services markets?

How can the idea of Akerlof's 'lemons' be applied to goods and services markets (that doesn't include second-hand cars)?
219 views

Troubleshooting Utility Maximization with the Lagrange Method

I'm trying to solve a utility maximization problem through the Lagrange method. The utility function is something like $u(x,y)=x+B(y-a)$. However, I'm running into problems as x and y do not come up ...
264 views

Wooldridge's Microeconomics book vs Cameron and Trivedi's textbook

I'm debating between 2 Microeconometric classes at my college, (I realize I'm fortunate to have a choice). One class uses Wooldridge's "Econometric Analysis of Cross Section and Panel Data" the other ...
143 views

Example in which revealed preference doesn't imply preference

I'm studying Varian's Intermediate Microeconomics, in which the principle of revealed principle is stated as follows (for now we're assuming strictly convex indifference curves): Let $(x_1, x_2)$ be ...
1k views

Negative Marginal Returns

In my economics class, we learned that in the short run, there are three stages of marginal returns: increasing, decreasing, and negative. As a firm adds the first few units of labor, specialization ...
236 views

What does the area defined by two different values for quantity under a supply curve represent?

Assume that a and b (b is greater than a) indicate the quantity of supply on a linearly increasing supply curve. How can be the area formed by those two points under the supply curve interpreted? The ...
26 views

Question regarding demand schedule and equilibrium consumption [closed]

Please refer to the two images posted at this link: http://imgur.com/a/si3ko Referring to Page 2, I'm not quite sure what the author is trying to say regarding the two bracketed portions. Considering ...
373 views

Difference between NPV and PDV

What is the difference between Net Present value and present discounted value when periods are given in infinity $\infty$ . Both are then equal to $\frac M r$?
268 views

Inferior goods, monotonic utility and strict concavity [duplicate]

Is it possible to have an inferior good under the assumption of a utility function which is strictly monotonically increasing and strictly quasiconvex? I do not think so, but I could not find a ...
38 views

Inelastic offer, tax paid by seller, who supports the charges

I have a small problem, I have a situation where we have a perfectly inelastic offer and a normal demand, then there is a tax that is paid by the supplier who supports the totality of the charges ? Is ...
91 views

own and cross elasticity for many products

This publication uses this formula to fit a model to predict the demand of a product A: ...
98 views

The equation for the firm's demand for labour

I have been stuck on this for a few hours (actually a few days). I can't find much useful information on the web that has made it any clearer. Suppose that a firm’s production function of output Q is ...
442 views

Showing the Utility Possibilities Frontier is downward sloping

The slope of the UPF must be equal to the slope of the MRT and the MRS. Is it therefore enough to show that the slope of the MRS is negative?
42 views

Uses of loans during recession

I've noticed that certificates of deposit have dropped their interest rates in my country. This seems to be due to lack of trust in economic opportunities and has caused an increase of liquidity in ...
166 views

Solving a Cournot oligopoly game with N firms [closed]

This is the full question: Find all pure strategy Nash equilibria of the Cournot oligopoly game with $N$ firms facing linear demand $P = a − Q$ when the total cost for each firm is $c_i(q_i) = q_i^2$. ...
165 views

Identify whether a good is giffen good or not and under what condition

Given the following partial information about a consumer's purchases.He consumes only two goods. In year 1, $p_1^1=p_2^1=100,x_1^1=x_2^1=100$ In year 2, $p_1^2=100,p_2^2=80,x_1^2=120$ Over what ...
406 views

How to find a firm's cost function based on its production function [closed]

The question A firm’s production function is given by $$q=F(L,K)=L^{1\over{4}}K^{1\over{4}}$$ find the firm's cost function $C(w,r,q)$, What I know so far I'm aware that the Technical rate of ...
223 views

marginal utility of consuming vs marginal rate of substitution

good day all I am taking second year economics, but my textbook is not very clear on this topic A quoted from Intermediate Microeconomics and Its Application. Nicholson, Snyder. 11th Edition. ...
57 views

What is the formula for how many more I need to sell in order to justify raising cost?

I need to know the name and formula for this problem. I have widgets which have a certain lube content to them. We currently are selling the widgets for 3.00 each. The lube costs .50 cents for each ...
2k views

How the presence of increasing returns to scale lead to market failure [closed]

How the presence of a sector with increasing returns to scale in a "perfect" economy may lead to market failure ? Can sb explain for me with the support of charts ?
1k views

If government impose price control, what happens?

I have this MCQ homework that I would like your opinion about Suppose government chooses to impose a price control on a good. Which of the following is NOT a potential consequence of the restrictions ...
63 views

price elasticity of output, makes sense?

I was wondering, in a log-log model of output, labour and commodity price where output is the depedent variable, does it make sense if the coefficient on the price variable is interpreted as the "...
867 views

Robinson Crusoe Production Economy [closed]

Robinson Crusoe’s preferences over coconut consumption, C, and leisure, R, are represented by the utility function U(C, R) = CR. There are 48 hours available for Robinson to allocate between labor and ...
240 views

Can budget lines be discontinuous?

It's been awhile since I've taken introductory microeconomics. I read budget lines can be discontinuous awhile ago but am suspicious as to such a concept being discussed in intro micro classes ...
523 views

Representing these lexicographic preferences by non-continuous utility function?

I have the following preferences and I am wondering whether I could represent them by a utility function: $R_1 \succ R_2$ <-> $R_1\leq Q$ and $R_2 > Q$, $R_1 \succ R_2$ <-> $R_1 \leq Q$ and ...
739 views

59 views

792 views

Perfect competition questions

I have problems with deciding whether those statements are true or false. In a short/long run price of equilibrium on a perfectly compettive market might be either lower or higher then average total ...
27 views

Why is the opportunity cost 0 in this case?

My book says that the opportunity cost of purchase of a specialized equipment that has no alternative use is zero and hence such an expenditure is a sunk cost. However, while calculating the user cost ...
22 views

Change of demand curve

I am supposed to solve the following problem: The price of coal oil is increasing more than 1%, due to the annoucment about decreasing the supply of coal oil on the market. How it will effect curve ...
13 views

Under what conditions should I use a Social Accounting Matrix Model vs. Multimarket Model vs Computable General Equilibrium Models?

What are the differences between the SAM, multimarket and CGE models. When should I use one over the others?
10 views

How can I model the impacts of improved agriculture technologies and food aid in a multimarket model?

Given a multimarket model for staple agricultural commodities wheat, rice, maize and sorghum, in a low-income economy, Im trying to figure out how I can use the multimarket framework to look at the ...
Derive demand function $x(p,w)$ from utility function $u(x) = \min\{x1, x2\} + x3$
I know how to solve the two-good case with $u(x) = \min\{x1, x2\}$, but the addition of $x3$ confuses me. Problem Derive the demand function $x(p,w)$ from $u(x) = \min\{x1, x2\} + x3$ What I did ...