All Questions
15,484
questions
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28
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non-ponzi condition
What Is The Differences Between R(T) And R(S) In No-Ponzi Condition In Ramsey Growth Model?
- 111
1
vote
1
answer
99
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Information asymmetry references and it's relation to freemarkets - reference request?
Is there any reading I can do of what information asymmetry can do to free markets?
- 111
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votes
1
answer
48
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A monopolist has decreasing average costs, setting the price equal to AC will lead to?
1)what will happen to the Output compared to the situation where MR=MC ?
2)what will happen to the Output compare to Competitive Output?
Attempt at Soln. :
1)
2) so definitely quantity of o/t for ...
- 3
0
votes
0
answers
23
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Ramsey no ponzi condition
Please help me understand how to create these functions, sometime they use "t" denote, sometime use "r" denote that make me feel confuse. Function (17) and from (19) to (23)
- 111
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1
answer
35
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Ramsey model problem
Explain the no-Ponzi game condition throughout the function.
Does the constrain function: also reflect include the No-Ponzi condition?
- 111
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votes
2
answers
47
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Debreu's ordinal representation theorem is unique up to a positive monotonic transformation, what is the source?
In Debreu's 1954 ordinal utility representation theorem, the utility is unique up to a positive monotonic transformation.
While the uniqueness result is well-known, I fail to find a proper reference. ...
- 249
0
votes
1
answer
26
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Deadweight loss and consumption externalities
here's the problem and my solution so far:
In this case, the Marginal Private Benefit (MPB) is given by the
equation MPB = 100 - 4q and the Marginal Social Cost (MSC) is given by
the equation MSC = ...
0
votes
1
answer
49
views
Nash Equillibrium - Depend On The Opponent's Strategy?
Say I have the following pay-off matrix:
For a one-shot game, it is easy to see, that (low, low) is the only Nash Equillibrium in the payoff-matrix.
However, say we're playing an infinitely repeated ...
1
vote
2
answers
64
views
Does emerge of cryptocurrency cause inflation?
I'm very newbie at economics, so the question may does not sound a good question.
I define value, any type of goods and services I can acquire in an economic deal. If I assume whole amount of value ...
- 145
1
vote
1
answer
119
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Why is the Modigliani-Miller theorem logical?
Quoting this SE question, who put it nicely, the M&M theorem basically states that:
...in a no-frictions world, two identical firms have the same enterprise
value, regardless of their financial ...
- 111
2
votes
1
answer
63
views
Mankiw Chapter 5 and Price-Specie Mechanism
I've recently been reading through Mankiw's Macroeconomics, 7th edition.
In Chapters 3 & 4 describe the Classical theory, which pretty much exactly lines up with the model that Keynes outlined in ...
- 31
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votes
0
answers
54
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utility functions of perfect complements
if preferences are described and in this case the preferences are perfect complements, we want to find an utility function that describes the preferences so we can draw an indifference curve. the ...
- 1
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votes
2
answers
49
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If wage is equal to P x MPL then where is the profit of the firm?
Excuse me if the question is too simple...
Wage = Price x MPL (Marginal Productivity of Labor)
I wonder how we can come to this conclusion as there is nothing left for Profit. I mean let's suppose ...
0
votes
0
answers
15
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Delegation to a Biased agent
Can somebody give an example for a biased agent who want to put more time in information acquisition then the principal?
0
votes
0
answers
53
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why is the MRS same for everyone?
If the consumers are optimizing and at interior solutions and facing the same prices, then the MRS=p1/p2 will be the same for everyone no matter the preferences and income. but why? I don't understand ...
- 1
1
vote
1
answer
69
views
How the saving rates were derived in Azariadis (1996)'s Impatience Trap?
The household maximizes his lifetime utility function according to
$$
\max_{c_1, c_2} v(c_1, c_2) := \frac{1}{\beta(c_1)} \log c_1 + \log c_2 - A(c_1, c_2)
$$
subject to
$$
\beta(c_1) = \begin{cases}
...
- 21
2
votes
0
answers
46
views
Estimating the form of a utility function on two or more commodities
I am looking for experiments for estimating the form a utility function of a consumer on two or more commodities. In particular, I would like to know e.g. if the utility function of a consumer is of ...
- 3,033
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1
answer
46
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Does a per-unit tax shift the demand curve too when dealing with an inelastic supply curve?
I’m studying Tax Incidence from Stiglitz’s ‘Economics of the Public Sector’, and it says that the tax incidence doesn’t change whether I use a shift in the demand curve or one in the supply curve. ...
- 11
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0
answers
11
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How much do gas prices impact in other product prices?
In my country, they are considering stop funding gas prices so prices would raises from 0,30 U$S to 1 or 2 dollars per liter. Some people argues this would impact heavily in inflation, which is ...
- 545
3
votes
1
answer
56
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Explaining structural v. reduced-form
Consider your audience is Econ 101 students.
You want to explain structural models and reduced-form models as easily as possible.
What prime examples (e.g., seminal paper reference) would you give to ...
- 1,211
1
vote
2
answers
38
views
Could a global tax agreement improve the Gini coefficient for income in all countries?
Does this line of reasoning make sense in terms of economic agents, even if implementation is highly unlikely?
The Gini coefficient is an imperfect but reasonable measure of income inequality within ...
user43089
2
votes
1
answer
331
views
How do I find the set of pareto optimal allocations?
Suppose there are 2 individuals and 2 goods. $u_1(x_1,y_1)=x_1+2y_1$, and $u_2(x_2,y_2)=x_2+y_2$. There are 2 units of good $x$ and 1 unit of good $y$ in total.
How do I find the set of Pareto optimal ...
- 365
3
votes
1
answer
146
views
Why doesn't this exchange economy have a walrasian equilibrium?
Consider an exchange economy with $n$ individuals and 2 goods $x,y$. All individuals have the same utility function $u(x,y)=x^2+y^2$ and the same endowment $w=(1,1)$.
I tried to solve the problem with ...
- 365
4
votes
2
answers
172
views
How to solve this aggregate production problem?
Consider a continuum of firms indexed by $a\in [0,1]$ and that $a$ is uniformaly distributed. a firm of type $a$ has a production set $Y^n$ as depicted in the figure below. note that good 1 is used as ...
- 41
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votes
2
answers
64
views
Reservation price and demand curve
Q1: There are $25$ consumers with each demanding 1 unit and each consumers' valuation of the product is $10$. How would the demand curve look like.
Q2: Now suppose there's a monopolist with $MC=8$ and ...
- 5
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votes
0
answers
13
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Parallel trends in Fixed Effects
I am reading a very interesting article by Ray and Pullabholta (2023). They start from the observation that adoption of groundwater wells - which are a necessary input to agricultural productivity, ...
- 65
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0
answers
42
views
Question About Stochastic Choice - MWG Exercise 1.D.5
I am studying microeconomic theory using MWG. I got stuck on Exercise 1.D.5, specifically part (c), but I would also like to have my part (a) and (b) checked by someone. Here is the exercise and my ...
- 251
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votes
1
answer
70
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Underlying assumptions of Bertrand competition
Q1. Under the lists of assumptions for Bertrand model it is mentioned in last that the following are intuitively deducible when considering the law of demand of firms' competition in the market:
If ...
- 5
3
votes
1
answer
94
views
Exchange economy with trade
Consider an exchange economy with 2 goods $x,y$ and $n+1$ consumers $0,1,\cdots,n$. Consumer 0 has utility function $u_0(x,y)=x^\alpha y^{1-\alpha}$ and endowment $w_0=(1,0)$. Other consumers $1,\...
2
votes
1
answer
95
views
How to find a Walrasian equilibrium for this production economy?
Consider a production economy with 2 consumers and 2 firms. There are 3 goods: leisure $l$ and two goods $x,y$. The utility function of both consumers are $u_i(l_i,x_i,y_i)=l_i(x_i)^2(y_i)^2$ and the ...
- 365
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0
answers
15
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How do I construct an analysis on the following question in applied financial econometrics?
I want to know how to make a thorough analysis by comparing the following regression outputs. The regressions are estimated using the Arbitrage Pricing Theory (APT) with the second one testing for ...
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votes
0
answers
12
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Determining macroeconomic events
Which of these events are macro economic events:
1)unemployment has increased over the past month
2)the pharmaceutical society invents a new medicine
3)the interest rates are decreasing for all ...
- 101
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votes
0
answers
30
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Help with Solow model
I need help with the following question, I would really appreciate any help. For the general case of any production function, the differential equation for k(superscript dot) looked as follows: k(...
- 1
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votes
1
answer
40
views
Deriving Unit cost function
Unit cost function is the minimum cost to produce one unit of output.
The solution to the above problem is:
where ai(w,r) is the amount of labour needed to produce 1 unit of good i at factor prices (...
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0
answers
24
views
How do I show that it's optimal to invest in equal amount of 2 risky assets via mean-preserving spread?
Suppose a risk-averse investor with differentiable Bernoulli utility $u$ and wealth $w$ that can be allocated between asset $X$ and $Y$. Both $X,Y$ have positive expectations. If the investor invests ...
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0
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13
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Basics of MRS. Interpretation and constant utility
I am sure this question has been asked before but I didn't know what to search for since its a quite long question.
Say, I have a utility function U = sqrt(x)*sqrt(y) and the MRS = y/x.
Say I have y = ...
- 1
0
votes
0
answers
39
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Do developed countries defraud trillions of dollars from developing countries?
According to the Guardian, rich Western countries defraud large amounts of money from poor countries, much more than they give in development aid.
If we add theft through trade in services to the mix,...
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0
votes
1
answer
48
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Cost Minimization
Guys in the following optimisation problem why are we not considering the partial derivate of K and L in the Lagrangian in the first two equations
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-1
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0
answers
19
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Are the country adjectivals official in currencies?
Currencies are often named with a country adjectival in front, for example "Argentine Peso". Is the choice of adjectival official when alternatives exists? For example for argentina there is ...
- 99
10
votes
4
answers
4k
views
Would poorer countries be better off by cutting off all trade with rich countries?
This question is related to another thread, but rather than hijack that thread I am posting my angle on it here.
In relation to this Guardian quote
If we add theft through trade in services to the ...
- 201
2
votes
0
answers
133
views
help with nested integrals in common agency public goods paper
I'm trying to derive the example function used in a paper I am reading and am stuck. Please help. Below is the equation. For now, all I am requesting is someone to help me solve for p. More details ...
- 21
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0
answers
38
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Pure exchange economy: What if a consumer can set prices?
I'm trying to solve the following problem:
Consider an exchange economy with 2 consumers and 2 goods. First, consumer A sets the price, then consumer B maximizes utility according to the price. Then ...
- 365
2
votes
2
answers
402
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In what way do developed countries steal trillions of dollars from developing countries?
According to the Guardian, rich Western countries 'steal' large amounts of money from poor countries, much more than they give in development aid.
If we add theft through trade in services to the mix,...
- 69
0
votes
0
answers
28
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Finding data set for econometrics project
I'm thinking of doing my undergrad research project on investigating the impact of happiness on stock market participation in the US stock market. However, I am struggling to find a data set. Does ...
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0
answers
12
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data on US college spending
I am writing a research paper on college spending and profit optimization. I need data on US colleges' expenditures, revenues, and the total number of students. Since I am not from the US I am not ...
1
vote
1
answer
69
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Trying to understand Walrasian equilibrium (Brown & Matzkin 1996)
I'm trying to understand page 6-7 of the Brown & Matzkin paper. Here is an example:
Consider a 2-person, 2-good pure exchange economy $E=(u_i,w_i)_{i=1}^2$ where both utility functions are ...
- 365
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0
answers
22
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Is this situation Pareto Optimal
"If either player is receiving his maximum payoff, then that outcome is Pareto optimal."
Is this True,False or Uncertain.
Solution: I guessed it false because we dont know the exact Utility ...
- 3
1
vote
0
answers
24
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Deriving euler equation and transversality condition
$U(c_t)=\sum_{t=0}^{\infty}\beta^t(\{u_0c_t+\frac{u_1}{2}c_t^2\})$ subject to $c_t+k_{t+1}\leq f_0 k_t$
I need to find the euler equations and the transversality conditions.
I have currently tried ...
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2
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0
answers
30
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AIC Calculation
Our object is calculating AIC, and we are unsure whether we can use our measure below when calculating AIC. The following are the data from the experiments and our method to calculate the information ...
0
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0
answers
32
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Calculating the value of this asset
calculate the cash value of a financed asset that is paid in the following way: an initial payment of 500,000, in month 2 a payment equal to half its value, in month 7 a payment equal to a third of ...
