# 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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### Guess 2/3 of the average with integers - mixed strategy equilibria?

The "Guess 2/3 of the average" game (Wikipedia) is a game in which n people guess what 2/3 of the average of their guesses will be, and where the numbers are restricted to the integer (in this case) ...
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### What is the difference between ordinary income effect and endowment income effect?

As far as I understand: Ordinary income effect: A change in the price of good 1 will affect my future behaviour (the quantities that I will buy of good 1 and good 2). But it doesn't really affect my ...
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### Will an increase in a complementary good with price unchanged move demand curve right and quantity demanded right, as well?

This graph shows the quantity of electricity that consumers demand at a regulated price set by the government. Adjust the graph by dragging the dot or the demand curve (or both) to show the effect of ...
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### Strategy sets and SPNE

I need to find the startegy sets for the two players in this game. I understand that the game has only one subgame, that is, the entire game. I cannot seem to understand the strategy sets of the ...
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### Profit Maximization and Returns to Scale

Assume a labor-intensive production function: $Q(L)=L^\beta$ Find demand of labor that maximizes profits (unconditional demand $L(p,w,r)$), the demand of labor that minimizes costs (unconditional ...
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### Book recommendation: first year economics course

Can anyone help me find a nice introduction (possibly popular economics) into the field of black market economics.
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### Supply/Demand Curve Equation (beginner) [duplicate]

The linear demand function is $Q_D = a + b(P)$. I understand from this thread that it can be thought of as a simplification/magnification of the overall demand curve. Is there an equation that ...
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### What does it mean when marginal profit is the same due to the “competitive principle”?

I am reading "Economic Development with Unlimited Supplies of Labor" by W.A. Lewis and he states that Though the capitalised sector can be subdivided into islands, it remains a single sector ...
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### Is there a possibility to have an inferior good (x) in a utility function where x & y have 0 cross elasticity?

A question I got on an exam that I think I messed up on: If we have cross elasticity of 0 (x & y are independent), can x be an inferior good? I answered with a yes. Am I wrong?
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### Question on Finding the Correct Emission Tax $t$

Let there be two companies $U_{1}$ and $U_{2}$ where, initially $U_{1}$ produces and sells $x$ units at $p=18$. Production costs are $C_{U_{1}}(x)=\frac{1}{6}x^3$ and in the process $a$ units of ...
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### Economics Masters Courses? [closed]

I want to do an economics masters course (not a PHD) in the UK or US preferably with a focus on game theory, auction theory, mechanism design and contract theory though I understand I'll probably have ...
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### When is the pegged price equal to the market price

Suppose the government pegs an exhaustible resource, at a price $P^*$. I found out that the shadow price (initial price of the resource if government didn't peg) would be Q_t = ( \sigma i S_t )^\...
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### Leontief utility with producer goods

This question may require some explanation. Also, I'm way out of my depths so please let me know if this question is misguided. The standard Leontief utility seems to assume the goods are consumed in ...
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### How does a Pareto efficient equilibrium scale for n individuals?

Say I have a starting situation with Pareto efficient allocations between 2 individuals, now a third one comes in and changes the allocations. Now a fourth one, etc. Up untill a nth individual comes ...
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### Does non-binding price ceiling effect the market? [closed]

If the Price of a commodity is 1 dollar and this price is the equilibrium price. At this price, the quantity demanded & supplied is 100(KGs). If government sets the price ceiling of 10 dollars, ...
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### Determining optimal consumption bundle [closed]

The utility function of the consumer is $5x^{0.5}y^{0.5}$ The income of the consumer is $5000$ The price of good $x$ is $1,000$ and the price of good $y$ is $500$. Determine the optimal ...
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### conditional factor demand functions for capital and labor [closed]

I don't how to put maths in here so using an image:
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### In a trading economy with many agents, can two agents with the same income envy eachother?

In a economy with an arbitrary number of agents whose preferences all satisfy the usual equilibrium conditions and with each starting with a random starting endownment, are there any two agents with ...
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### Quasi-linear utility functions

I have the following quasi-linear utility function given: $u_0 = f(x_1) + x_2$ (with $f'>0$,$f''<0$). I know that the indifference curves are vertically parallel, which means that the slope is ...