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3 votes

- Economics 101

I have questions about learning economics, is it possible to learn it while studying math? It is not just possible, its great advantage. Economics nowadays is quite mathematical subject. Its not ...
1muflon1's user avatar
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0 votes

Why does quantity supplied increase with price in economics?

Thank you for asking this question. This has confused me too. As a layman, trying to understand these fundamental concepts can be really difficult, especially when attempting to reconcile isolated ...
Destry's user avatar
  • 1
5 votes
Accepted

Is increasing Average Product(AP) always implying increasing Marginal Product(MP) in microeconomics?

Consider the following production function: $f(x)=\begin{cases} x^2 & x < 1 \\ x^{\frac{3}{2}} & x \geq 1\end{cases}$ In this case, the average product is $\text{AP}(x)=\dfrac{f(x)}{x}=\...
Amit's user avatar
  • 9,196
0 votes

Consumer surplus in Logit model should minus actural payment?

1muflon1 is right. According to your link, the author meant to use the willingness-to-pay to represent the utility gain from transaction, net of price. See the last several lines of p.38 of Train (...
DiZ's user avatar
  • 21
1 vote

Walrasian demand with a twist of Leontief function

$u(x_1,x_2)=\min(x_1,x_2)+5\max(x_1,x_2)=\max(x_1+5x_2,5x_1+x_2)$ which is not quasi-concave, but is an increasing quasi-convex function. So, demand will be at one of the two end-points of the budget ...
Amit's user avatar
  • 9,196
1 vote
Accepted

how to reach Continuous Expected Utility (EU)?

I believe we get it from the axioms you have provided with a few technical conditions on the spaces we are working with. Let $X$ be a separable, metrizable space (like your $\mathbb{R}$) and let $\...
Walrasian Auctioneer's user avatar
1 vote

What is the point of Slutsky and Hicksian Compensation. And What to they have to to with WARP?

We study substitution effect of price by keeping income effect to be zero. Since a price decrease is equivalent, let's discuss the scenario where there is a price increase from $p$ to $p'$. Ideally, ...
DiZ's user avatar
  • 21
2 votes
Accepted

Are all subcorrespondences of the weak Pareto correspondence monotonic at the unrestricted domain of linear orders?

The question in the title seems to differ from the question in the body: all/any. At least the question in the title does have a negative answer: Let $A=\{a,b,c\}$. Consider the sub-correspondence of ...
Michael Greinecker's user avatar
0 votes

Questions about output, quantity, level of output and quantity of output, investment level

Here are answers to several of your questions: a) In the context of supply and demand curves in introductory microeconomics, there is both "quantity demanded" and "quantity supplied&...
C.M.O.B.'s user avatar
7 votes

Pareto Optimal vs Pareto Efficient

The terms "Pareto optimal" and "Pareto efficient" mean the same thing. However, this paper suggests that the term "Pareto optimal" carries a normative connotation, and ...
C.M.O.B.'s user avatar
1 vote
Accepted

Individual invest on each asset

The individual will invest the whole $\\\$ 10,000$, which makes sense, since in the worst case scenario he still gets a positive return. He has to decide which fraction $\alpha$ to invest in asset $A$ ...
Lorenzo Castagno's user avatar
2 votes
Accepted

Non-nullity assumption in vNM theorem of cardinal utility

A preference such that $p\succeq q$ for all lotteries $p$ and $q$ clearly does (!) have a cardinal utility representation: The utility function over outcomes must be constant, and this is clearly also ...
Michael Greinecker's user avatar
1 vote
Accepted

Proof that if the MRS is increasing in one good, then the other is normal

Note that $(a_1,a_2)$ is the utility maximizing bundle at relative price $MRS(a) = (= p_1/p_2)$ and budget $w = MRS(a).a_1 + a_2$. First as $b$ is utility maximising, $MRS(b) = \frac{p_1^0}{p_2^0}$. ...
tdm's user avatar
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