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15 views

How to integrate technology lifetime in NPV

I want to calculate and compare the NPV for different ways of producing a good X. The NPV should be calculated for 30 years. The following technologies can be used for production: Technology A, which ...
0
votes
0answers
20 views

Production for multiplant firm?

A multi-plant firm will never produce at a plant with an increasing marginal cost when they own another plant with a decreasing marginal cost. Is this true? My reasoning behind this is that firms ...
0
votes
1answer
58 views

Kuhn Tucker Maximization

I have to maximize following expected utility function using Kuhn tucker conditions - Since expected utility function are increasing $C_{1,t}$ and $C_{2,t}$ so constraints (i) and (ii) will hold with ...
-1
votes
2answers
57 views

Prove quasi-concavity of utility function [on hold]

How do you prove from definition (no Hessians) that $U(x_1,x_2)=x_1^2 x_2$ is quasi-concave?
3
votes
1answer
27 views

Question about the relationship between Weak Axiom and Slutsky Matrix

We know that if a differentiable Walrasian demand function $x(p,w)$ satisfies Walras' law ($p^Tx=w$), homogeneity of degree zero ($x(\alpha p,\alpha w)=x(p,w)$), and the weak axiom of revealed ...
-3
votes
2answers
174 views
+100

Which authority on this planet determines the strength of all currencies and can it be rebelled?

I know that to determine the strength of a currency several factors are contemplated, such as: Amount of money going in and out of a certain state, in a given period of time Stability of the ...
1
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0answers
55 views

Dynamic programming, optimal consumption-savings (finite horizon) problem

Let $w_t$ denote a consumer's wealth at time $t$ and $c_t$, the amount she chooses to consume, so her savings exiting this time period are $w_t-c_t$. Given this savings decision, her savings $w_{t+1}$ ...
-3
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0answers
15 views

What is this kind of survey called? [on hold]

What do you call a survey that required to be filled by all members of the sales team? The choices are: stratified sampling non-random sampling census This is a question I got on my business exam ...
0
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0answers
25 views

How does a government implement negative interest rates in practical terms?

We usually understand interest rates from a very simple story "you went to a bank ans asked to borrow money, the bank agrees but requires you to return an extra amount be the end of the loan term, ...
1
vote
1answer
43 views

Why charge higher interest rates to poorer customers?

Consumer loans/credit charge different rates depending on the individual's risk. In particular, it charges more to poorer individuals. Whilst this seems to make sense from a risk perspective, there ...
-4
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0answers
17 views

How can I solve this? [closed]

How can I solve the diminishing marginal rate of technical substitution?
1
vote
1answer
22 views

First-price symmetric auction with discrete value

I've been trying to work the following problem out but I can't quite seem to understand it, or the whole concept of first-place auctions. I don't understand how we get to the equilibrium. The problem ...
0
votes
0answers
18 views

Is the supply of a price-taking firm increasing in price?

Is the supply of a price-taking firm increasing in price? When the price goes up, this means that firms can make more profit. Therefore, they would want to increase their supply. Is there a way to ...
1
vote
0answers
65 views

What is Economic Interpretation of three nonlinear equations?

I have the following nonlinear system $w$ is wealth $c$ is consumption $r(w)$ is gross return on wealth $a,b, d$ are parameters which are strictly positive and fixed. $$\dot{w} =r(w)w-c$$ $$\...
0
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0answers
32 views

Examples of textbook definitions of transaction costs, for a non-econ student

I'm not an econ major, neither am I taking it as a minor, however seemingly out of nowhere economics has jumped into my CS class when talking about the role of IT in reducing transaction costs of ...
1
vote
0answers
16 views

Strategic Complementarities and Multiplicity

Consider a coordination game, in which actions taken by players are strategic complements. Moreover, assume that actions are strong strategic complements, in that the slope of the best response ...
0
votes
0answers
26 views

Why do commercial banks buy government bonds at negative interest rates instead of keeping cash?

I know commercial banks need to meet liquidity requirements, but why would they choose to invest their money in an instrument that is guaranteed to give them a negative return, instead of just keeping ...
0
votes
1answer
34 views

Why are the same set of controls used for both OLS and 2SLS?

I have been reading several papers that use 2SLS. These papers usually also show the OLS regression results. I noticed that when authors report results for 2SLS, they also include control variables ...
-1
votes
0answers
9 views

Effects of Increase in Total Factor Porductivity in labor, asset, and money markets [on hold]

What is the effect of a decrease in current total factor productivity, z. Determine the effects this shock will have on output, investment, consumption, employment, real wage, real interest rates, ...
-2
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0answers
10 views

give the following demand function qd [on hold]

qdA =80-0.6p qdB =-120-0.4p p=500-1.2qdc (a) derive the market demand function (b) supposed price in the market are given as p=15,20,25,and 30.calculate the various quanties and present your answer in ...
1
vote
0answers
18 views

Continuous trading economies

Continuous trading economies. I see this expression in many papers but I do not know what it means in the precise technical sense. And I'm not an economist. Maybe it could refer to an economic ...
-1
votes
0answers
10 views

Households and Capital Accumulation Problem Set Up

I have to set up the competitive equilibrium for this economy, and am given the following information: The household directly owns the capital stock and makes the investment decisions. And has a ...
0
votes
1answer
30 views

The assumptions of Rational Expectations Models

What are the assumptions between rational expectations models and how restricted are there for the following results of economic theory? Where can I find them all gathered in some textbook or in the ...
3
votes
2answers
1k views

What precisely is scarcity?

I'm aware that certain terms in economics have precise definitions that don't necessarily line up with our intuition about what they mean. I'm currently writing a paper that heavily relies on the ...
0
votes
1answer
16 views

Questions about profit function [duplicate]

I know that a profit function is defined by $\pi(p;w)=\max_{x\in\mathbb{R}}pf(x)-w\cdot x$ and $\pi$ is a convex function (i.e. $\pi$ is convex in $(p, w)$. My concern is how we can find the max value ...
0
votes
1answer
33 views

How can I prove $∇U(x).D_m x(p,m)= \text{shadow price}$?

Why inner multiplication of the gradient of utility function in derivative of demand function with respect to income is equal to shadow price? This is the equation which is given but I don't know ...
-2
votes
1answer
29 views

question about monopolies [closed]

A monopolist is selling 6 units at a price of 12. If the marginal revenue of the seventh unit is 5, we can conclude that the A) price of the seventh unit is 10. B) price of the seventh unit is 11. C)...
0
votes
1answer
50 views

Efficiency conditions for externalities

I have a 2 consumer 2 goods economy. Both the goods produce an externality for the other consumer, therefore, they are a part of the other's utility function. How do I show that despite the ...
5
votes
3answers
71 views

Do Keyensians believe that it's wrong for households to aggresively save money?

Many Austrian/Neoclassical websites argue that Keynes and Keynesians demonise saving and encourage individual people to spend rather than save. Someone (not an economist) recently told me that I need ...
1
vote
0answers
11 views

Can the effect of different prices of gasoline at different gas stations be measured?

I am looking for studies in which the effect on demand of different prices of gasoline at different gas stations in the same area is measured or estimated (on the same day or hour). This question ...
2
votes
2answers
22 views

How do I calculate the services sector as a percentage of GDP?

Could anyone explain how I should calculate the share of services sector as a percentage of GDP? I get the numbers for US GDP from Table 3: https://www.bea.gov/system/files/2019-10/gdp3q19_adv_0.pdf ...
0
votes
1answer
28 views

Who is Butler in Marx' footnote in Das Kapital?

In footnote [7] of Marx's Capital, T.I, Ch. 1, Sec 1, after ...contradictio in adjecto, there are these quotes: «Nothing can have an intrinsick value.» (N. Barbon, t. c., p. 6); or as Butler says - «...
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0answers
15 views

echange rate from LOC/EUR to EUR

I have import values in LOCEUR (LOC is local currency). How can I obtain these values only in EUR? My data are from Eurostat, where external trade indicator is "Exports in million of ECU/EURO"
0
votes
1answer
24 views

Study guide (and…) for “Intermediate Microeconomics with Calculus” by Varian

I have been googling study guides, solution manuals and other helpful material made by professors. But I have not found anything useful. Q: Do you guys know anything that will make the book easier ...
0
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0answers
13 views

Spending despite fiscal deficit

This is going to be a rather simple question. Surprisingly, I did not find quite a lot of answers satisfactorily explaining my point. The question goes like this- The USA, under the Trump regime, ...
0
votes
0answers
19 views

demand for money

I am currently studying the demand for money by Blanchard. this model assumes that the amount of money held is basically related to transaction levels and the the attractiveness of bonds. i.e.: ...
0
votes
0answers
14 views

A question about independence of LATE framework (IV)

I came across the assumption of independence of the LATE in 2SLS: My first reaction is, why D1i and D0i are independent of the instrument Zi? Shouldn't the treatment and IV be correlated for the IV ...
0
votes
0answers
20 views

Cobb-Douglas demand yields a zero marginal revenue, monopolies don't exist?

From here and a pile of maths that I've done myself, $x_1 = \frac{a}{a+b}\frac{m}{p_1} \\ x_2= \frac{b}{a+b}\frac{m}{p_2}$ This yields inverse demand equations, when you have numbers stand in for $...
0
votes
1answer
17 views

Penance strategy game theory

I am having some difficulty in understanding the following use of the penance strategy as a strategy to support compliance in the repeated game presented in Asheim et al. (2006). I understand penance ...
-1
votes
0answers
14 views

utility derivation for a non Cobb Douglas function, find hicks and Marshall demands [on hold]

I am having troubles answering to these following questions since the utility function is not a Cobb Douglas function, I am not sure about the results I need to find fo Hicksian and warlasian demand ...
0
votes
0answers
6 views

What was the GDP PPP per capita of Equatorial Guinea in 2017? (very different figures according to different sources)

This list List of countries by GDP PPP per capita gives Equatorial Guinea a GDP per capita of 34,900 according to CIA and a GDP per capita of 24,817 according to World Bank in 2017. The differences ...
0
votes
2answers
27 views

Why do we have VAT on (most) services?

My knowledge of economics is quite limited, but as far as I understand, the "added value" which is taxed by value-added tax refers to the difference in the cost of production and the cost in the store....
0
votes
1answer
18 views

ROI and stock rates

I'm an engineer with minimal to zero knowledge about economical topics, please be patient with me if the following question makes no sense or is too basic ... Currently I'm working through the "...
0
votes
0answers
16 views

On statements of Dalio

Last night I was watching the following videos https://www.youtube.com/watch?v=YVLJRGA5uAk and https://www.youtube.com/watch?v=AhDrvQiNV5M&t I am considering the bet on gold with respect to his ...
5
votes
3answers
954 views

Is a mixed strategy ever the best response to a pure strategy?

Suppose you are playing a game against an opponent whom you know only uses pure strategies. My question is, is there any such game in which using a mixed strategy in response is better than all the ...
1
vote
1answer
38 views

Regarding the Expenditure Function Underlying a Bliss Point

I've been looking at expenditure systems and have been really interested in the behaviour of the demand system that underlies bliss points: Consider the bliss point utility function of the following ...
0
votes
1answer
20 views

What is a substitution pattern?

I know what substitution effect is but I am not sure what substitution patterns are. To give some context the author says the following: "I analyze the substitution patterns between exchange ...
0
votes
0answers
16 views

How much economic value is held with 'stock-on-hand'?

I was visiting a very large market in Asia and a question popped into my head. Globally, what is an estimate as to the annualised economic value of manufactured goods that are listed as stock-on-hand? ...
-1
votes
1answer
24 views

Q: Determining Consumer Price Preferences

I have a homework question that I simply cannot make sense of: Points A and B are two bundles on the same indifference curve for an individual. At bundle A, $q_1 = 16$, $q_2 = 1$, and the $\mathrm{...
0
votes
0answers
14 views

Estimate Markov process for incomplete market model

Let's say I have an economy in which the agent's budget constraint is: $c_t + k_{t+1} = (1+r-\delta)k_t+w_t\varepsilon_t$ Where $\varepsilon$ follows a Markov process with 2 states. I now want to ...

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