All Questions

1
vote
1answer
38 views

Constructing a Production Possibility Curve (PPC)

I am trying to create a PPC, in which there are two goods (e.g. apples and oranges). My question is, does it matter which goods are plotted on the x or y-axes? The opportunity cost per good remains ...
1
vote
0answers
21 views

Are these views on money creation set out by McLeay, Radia, & Thomas (BoE, 2014) mainstream/widely-accepted or heterodox?

In the Bank of England's Quarterly Bulletin, 2014 Q1, McLeay, Radia, & Thomas write a pair of articles titled: "Money in the modern economy: an introduction" and "Money creation in the modern ...
1
vote
1answer
90 views

Simple Econometric question

From LLN, we have $\text{plim} Y_n=\mu$. Now you have $W_n=Y^3_n$, what is the probability limit of $W_n$? Please help me answer this and thank you!
0
votes
0answers
34 views

why doesn't every country scale up the prices to the international level?

I live in an Asian country in which the average monthly salary is maybe 300-400 dollars but things (apart from exported goods like laptops or smartphones) are reasonably cheap compared to their price ...
-1
votes
1answer
20 views

how to find the elasticity of log(y) =β0+β1log(x) [closed]

I'm struggling with this question. Please help out with the correct formula. how to find the elasticity of log(y) =β0+β1log(x).
1
vote
2answers
56 views

How does a bank create new money when it pays its own staff?

I am reading Ryan-Collins et al. (2013, Where Does Money Come From? A Guide to the UK Monetary and Banking System). I think I understand how banks create new money whenever they make a loan. Using ...
0
votes
0answers
18 views

On marginal arguments for equilibrium conditions

On the Saylor website's course on economics, there is the following sentence, which I do not understand. "In a simple market under perfect competition, equilibrium occurs at a quantity and price ...
0
votes
0answers
17 views

Supply/Demand Shift (Find New Equilibrium)

Starting: supply curve $y=x+10$ and demand curve $y = -x+30$ with equilibrium at (10, 20). The problem states that DEMAND shifts leftwards by 3 units and to find the new equilibrium. My professor did ...
0
votes
0answers
21 views

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) ...
0
votes
1answer
40 views

Constrained Optimization using Lagrangian method

The stationary points that we derive by solving the first order conditions of the Lagrangian are those points global optimum points or local optimum points?
0
votes
0answers
24 views

If regional subsidiaries bypass trade restrictions, why are FTAs needed?

One of the ways corporations trade transnationally in the face of local restrictions on market access is to set up subsidiary companies or regional offices from which trade is conducted. If such ...
2
votes
1answer
23 views

What are some of the barriers to trading services?

As I understand it countries negotiate free trade agreements in services using the WTO GATS. But what are some of the barriers to the transnational exchange of services that an FTA would seek to ...
2
votes
2answers
41 views

Matchstick Game

Consider the following $2$ player finite extensive game. Player $1$ moves first. She must choose an integer from $1$ to $10$, and place that number of matchsticks on the table. Next, Player $2$ must ...
0
votes
1answer
28 views

Solution to maximization not Pareto efficient

In my economics class, we saw a proof that if an allocation $ ((\hat x_h), (\hat y_f)), h\in H$ (the set of households), $f\in F$ (the set of firms) is Pareto optimal/efficient, it must necessarily be ...
0
votes
0answers
42 views

What international payment systems do exist?

I recently read up on the Society for Worldwide Interbank Financial Telecommunication (SWIFT). As faar as I understood it was up until recently the only provider of a system to exchange money ...
2
votes
1answer
60 views

Imperfect Substitutes and Utility Funcitions

The utility function for perfect substitutes is defined as U(X,Y) = aX + bY. If the two goods X&Y are imperfect substitutes what would be their utility function?
2
votes
2answers
41 views

What are the assumptions behind calculating the market equilibrium from supply and demand curves?

Imagine that there are 5 buyers (B1,...,B5) with maximum willingness to pay as follows: B1 = $5 B2 = $4 B3 = $3 B4 = $2 B5 = $1 Imagine that there are 5 sellers (...
1
vote
1answer
25 views

real gdp per capita vs real gdp

this site summarizes the difference between GDP and GDP per capita as: ...
2
votes
1answer
40 views

What was “Pareto's proof of the immeasurability of utility”?

Wong (1978, 2002, Foundations of Paul Samuelson's Revealed Preference Theory), repeatedly refers to "Pareto’s proof of the immeasurability of utility". What was this proof?
0
votes
1answer
42 views

What's the market equilibrium price for the used good?

On a perfectly competitive market, a buyer wants to buy a used good. He is willing to pay $30$ for a badly used good, and $60$ for a nicely used good. The seller is willing to sell a badly used good ...
3
votes
0answers
24 views

Sources on Border Carbon Adjustment

A large number of US economists have signed a Statement on Carbon Dividends, advocating a revenue neutral carbon tax as the best policy measure to reduce carbon emissions and so mitigate climate ...
1
vote
1answer
41 views

Solving a LRE model in King-Watson form using alternative algorithms

I have a linear rational expectation model that is in the King-Watson form: AE_{t}y{t+1} = By_{t} + C_{0}x_{t} + C_{1}x{t+1} (1) with the driving process <...
0
votes
0answers
26 views

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 ...
1
vote
0answers
21 views

What are the definitions of the terms value, wealth, and utility in economics?

Are there any definitions for the following three terms that are widely agreed upon in economics? Value Wealth Utility In particular, are these terms identical? If not, what differentiates them? I ...
0
votes
0answers
11 views

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 ...
4
votes
1answer
72 views

Computing pure strategy Nash equilibria in finite games

I am trying to compute the (pure strategy) Nash equilibria of some discrete auctions. More precisely, let us define the strategy of each player as a function mapping from every valuation that they ...
0
votes
2answers
68 views

Key points for a speech on Capitalism [closed]

I was given an English task in which the teacher has asked us to do a presentation/speech on Capitalism. The thing is he didn't specify which aspects (historical, economical and the political) we ...
0
votes
1answer
30 views

Is it true that when the overall money supply decreases, that the demand for money decreases and the demand for bonds and securities both increase?

Is it true that when the overall money supply decreases, that the demand for money decreases and the demand for bonds and securities both increase? I understand that to increase the money supply, the ...
0
votes
0answers
5 views

Clarification on futures market and price speculations leading to oil price hike in mid 2000s

I am sorry if this question has already been asked. I am very new to the field of economics, and I am currently trying to understand the idea of futures market and price speculations in relation to a ...
1
vote
1answer
46 views

What if price were a function of buyer's income?

If everyone's income were public information, would purely profit-seeking sellers benefit from charging different prices to people based on their different incomes? My intuition says yes because a ...
0
votes
0answers
9 views

How theory of welfare economics and social choice is connected to DSGE models?

How theory of welfare economics and social choice is connected to DSGE models and how DSGE models can be used to test theories of welfare economics and to predict the policy outcomes?
0
votes
0answers
18 views

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 ...
1
vote
1answer
25 views

How Do Imports Affect GDP

Lets say the U.S. imports a brand new Ferrari that costs $600,000. I know that it would take away from the U.S. GDP since it's considered an import. However, if a consumer buys that Ferrari from the U....
0
votes
2answers
35 views

Question about maintaining fixed exchange rates

In my textbook, borrowing from abroad is listed as one of the method to increase the value of a currency by shifting its demand curve to the right. "If the country borrows from abroad, its loans ...
1
vote
0answers
15 views

How to control for population in Difference-in-Difference?

Random example, but let's say I'm examining the effect of a health program on influenza cases in India. They just randomly start the program in 7 of the 29 states. I have data on the number of flu ...
1
vote
1answer
26 views

What is an Economic Sector?

I am of the understanding that an Economy is broken down as follows: Traditional; Command; Market; Mixed. Each Economy being made up of Sectors, which in turn, are made up of Industries. Simply put,...
0
votes
1answer
37 views

Endogeneity problem with a dummy variable

I have a panel data model as following, $$Y_{it}=intercept +B_1X_{it}+B_2Q_{it}+error_{it}$$ where $i$ is for firm and $t$= time. $Y$= trade credit demand, $X$= inventory cycle, as inventory ...
1
vote
1answer
42 views

What are general equilibrium effects?

Im reading alot on public finance and have been seeing alot of mention of measuring "general equilibrium effects". I know what general equilibrium is, but i dont know what general equilibrium ...
0
votes
0answers
23 views

MRS of good X for good Y

I'm having some confusion with using the terminology of MRS. For example, let's take up this question: If good 1 is a “neutral,” what is its marginal rate of substitution for good 2? The answer is:...
0
votes
1answer
40 views

Is there a definitive way to tell if an action causes a movement or shift in a supply-demand graph?

I am taking AP Macroeconomics, and am about 2/3 of the way through the curriculum. We have learned about various supply-demand graphs, and right now we are working on the market for money. I have ...
0
votes
1answer
25 views

Demand Curve Price not perfectly elastic

I'm trying to make the argument that our Sales go up when prices for all our Products are 30% off. Which I believe should be our new Regular Price. but our Demand Curve doesn't support this. Should I ...
0
votes
0answers
10 views

Two deflator series with different base year to proxy real exchange rate

I'm conducting a research in which the real exchange rate serves as a variable. A quick literature review shows that we can use the product of the nominal exchange rate and the ratio between the US ...
1
vote
0answers
42 views

Pareto Efficiency Outcomes in Games

I have started studying the Pareto efficiency notion in Game theory. The definition I am familiar with is this: Strategy profile $\mathbf{s}$ Pareto dominates strategy $\mathbf{s}'$ if for all $i\in\...
0
votes
1answer
47 views

Why does capital flight cause inflation?

Context: I was watching a video about Venezuela, and, it all started with capital flight due to poor confidence in the government. The government tried to stop it, and in the process it created a ...
0
votes
0answers
17 views

Increase of price of good and effect on elasticity of demand

Price elasticity of demand of good A is 1.20. If we increase a price by 15% what will happen to quantity demanded of good A? My answer is 18% increase since % change in Q = 1.20 * %change P Is this a ...
0
votes
0answers
30 views

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 ...
1
vote
1answer
26 views

Have I found the correct Emission Price

Let's say that there is a hotel owner $(H)$ and a woodworker $(W)$ working in close proximity to one another. The woodworker produces $x$ units to sell at market at $p_{x}=6,5$. From the woodworking ...
2
votes
1answer
35 views

What's an example of a resource, raw material that has become scarce?

I'm interested in the elasticity price demand that predicts that as a resource becomes more scarce, it gets more expensive. Regarding oil price this isn't clear. Is there an example of a resource ...
1
vote
0answers
13 views

Feasible approaches to allocate n unique indivisable items among n individuals

Suppose I have n individuals and n unique, indivisible objects of potential value. I want to allocate those objects so as to make total welfare as great as possible, subject to the constraint that no ...
0
votes
1answer
40 views

How Does Production Possibility Curve Shift (Partially)?

Textbook: "Suppose that a new pizza assembly line improves the pizza production process and that the development of the new assembly line does not require the use of more of society's resources. ...

15 30 50 per page