# Tag Info

### Economics term for those who benefit even though they didn't contribute

I think the economic term is free-riders.
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It's called a Principal-Agent Conflict. The RIAA/MPAA act as agents on behalf of the people who actually produce content (and consequently end-consumer value). To maintain relevance to their ...
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### Is scalping tickets harmful?

There is a good Planet Money episode on ticket scalping; I recommend it. The reason for banning ticket scalping has nothing to do with economic harm, and everything to do with making the arts (or ...
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### The relationship between the expenditure function and many others!

Following up on the excellent MWG diagram in Amstell's answer, the fundamental observation needed is that holding $p$ fixed, $e$ and $v$ are inverses of each other. $e$ tells us the amount we need to ...
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### Marshallian Demand for Cobb-Douglas

Since $a + b=1$ the equations are exactly the same. Substituting in for $a+b$ with $1$ in the third and fourth equations gives the first and second equations.
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### Gross substitutes vs. net substitutes

Intuitively, a higher price for pears means that I have to give up more apples to be able to afford an extra pear (or, conversely, if I give up one pear then the number of extra apples that I can ...
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### The relationship between the expenditure function and many others!

Not sure how much this will help, but the diagram in Mas-Colell p.75 is something I always have in mind when deriving these functions. I'm not sure what books you're using, but Microeconomics by Mas-...
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### Is the market price objective?

The market price is the current price at which something may be bought or sold. If a good is not sold or bought at a particular price, then that is not the market price. Whether or not any particular ...
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### Can someone explain graphically why MRS is invariant under monotonic transformation?

You're right that it's a bit counterintuitive that the shape of the indifference curves shouldn't change when you transform the utility function. The reason is that you are transforming along an axis ...
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### Do perfect complements have to be normal goods? If so, why?

A good is normal if its demand is increasing in income. So let $p_x$ and $p_y$ be the price of the goods with quantities $x$ and $y$ and let $m$ be income. Suppose $ax>by$. Then $\min\{ax,by\}=by$....
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### Is it possible to derive indifference curves given marshallian demand function?

Yes, under some conditions. This is the classic integrability problem: for detailed discussion, see some excellent notes by Kim Border. Several other technical conditions are required, but the most ...
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### Why does Slutsky compensation "overcompensate" the consumer?

Here's a figure to explain: Starting from the old price line, where the optimal consumption bundle is point $A$, we increase the price of $y$ to get the new price line. The Slutsky compensation says ...
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