Giskard
  • Member for 7 years
  • Last seen this week
Can an unprofitable company increase GDP?
Accepted answer
5 votes

You are correct in suspecting that this firm produces no added value, but this does not contradict your definitions. We sum up the cost of salaries and retained earnings of all firms in the economy [...

View answer
Where can I find a calculator for constrained optimization of general form of algebraic equation?
Accepted answer
4 votes

You can set the decision variables in Wolfram Alpha. E.g., maximize [{x*q-q^2+a} , {q}] maximizes the function $x*q-q^2+a$ w.r.t. the variable $q$. For further details read the reference sheet of ...

View answer
What is the problem with this opportunity cost example?
Accepted answer
2 votes

The joke is conflating the value of the item you get and the value of the option to determine which item you get. Suppose I value the Snickers at $\\\$.4$ and the M&Ms at $\\\$.75$. If I am ...

View answer
Show that slope of MR (marginal revenue) is negative for monopolists
Accepted answer
3 votes

You want to show $$ \frac{dMR}{dQ} < 0. $$ As you point out in the comments $$ \frac{dMR}{dQ}= Q\frac{d^2P(Q)}{dQ^2} + 2\frac{dP(Q)}{dQ}. $$ The linear case When $P(Q) = a - bQ$, assuming $a,b>...

View answer
Why, when companies re-release things to capitalize on nostalgia, do they always seem to do it half-heartedly?
4 votes

Can somebody explain why the companies do this [...]? Well people seem to buy it anyway so it makes them money. Can somebody explain [...] why people seem to buy it anyway? Well, you seem to have ...

View answer
Is there any special reason to use the character "k" standing for the "early"?
2 votes

You can write the author to know for sure, without this one can only speculate. I don't think the solution is that there is a word for early that starts with a k. Rather people do not like to use $e$, ...

View answer
Do the continuity axiom and transitivity axiom justify non-satiation?
Accepted answer
3 votes

A counterexample Suppose the preference relation $\preceq$ is such that for all bundles $x,y$ we have $x \sim y$. This relation satisfies transitivity and continuity (it satisfies all four "...

View answer
Can the indifference curve (set) not be a curve at all?
Accepted answer
2 votes

You can make literally any set into an indifference curve of a "well-behaved" (complete, transitive, reflexive) preference relation. Let $H \subset \mathbb{R}^n$. Assume that the preference ...

View answer
What type of dividends are there
2 votes

dividend (n.) early 15c. [...] from Latin dividendum "thing to be divided," neuter gerundive of dividere "to force apart; to distribute" Source: Online Etymology Dictionary Thus ...

View answer
In a deflationary recession, lower demand leads to lower prices. Does this contradict the law of demand?
1 votes

Perhaps this means that the demand curve is shifting to the left and hence lowering the competitive price (the price reached at market equilibrium). Yes. Indeed the "law" of demand holds ...

View answer
Finding the cost-minimising production allocation in a Cournot merger with symmetric costs
Accepted answer
1 votes

You want to model the decision problem of firm $M$. In case they produce a total quantity of $q_M$, they can split this between factories $1$ and $2$. Firm $M$ can minimize the cost of producing $q_M$ ...

View answer
I am given an annual interest on my money. How do I calculate how much interest I earn daily?
3 votes

You are not considering compound interest. From Wikipedia.: Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. [...] ...

View answer
What is the "dummy variable trap"?
2 votes

From Wikipedia (emphasis of the simple example by me): In the panel data, fixed effects estimator dummies are created for each of the units in cross-sectional data (e.g. firms or countries) or ...

View answer
Evidence for or against the Efficient Market Hypothesis in financial markets and the currently dominant view
Accepted answer
2 votes

The abstract of EVIDENCE FOR AND AGAINST THE VALIDITY OF EFFICIENT MARKET HYPOTHESIS by Milјan Leković: The concept of an efficient financial market, in literature known as efficient market ...

View answer
Why do companies and stores never seem to take into consideration the fact that few people want ugly colours of the same product?
5 votes

Confirmation bias While there could be economic reasons for some of these phenomena, I think you are very likely experiencing confirmation bias. You are retelling personal stories that fit the ...

View answer
Offer curves for giffen good
Accepted answer
4 votes

Below is a graph of the price offer curve of good $y$ when income is $48$ units, $p_x = 8$ and the utility function is $$ U(x,y) = \min\left(2x+2y,x+10\right). $$ (Based on "Simple Utility ...

View answer
I don't know why these two method yield different solutions for marginal product of labour
Accepted answer
4 votes

I am not sure why you expect method two to work, as generally $$ \frac{\partial F(K,N)}{\partial N} \neq \frac{\partial F(K,N)}{\partial K}\frac{\partial K}{\partial N}. $$ These are partial ...

View answer
On the (rather strange) notion of strategies in repeated games
4 votes

The standard definition of a strategy assigns an action to every decision node/information set. This definiton is at least a jack of all trades; it works well in most cases and sometimes leads to ...

View answer
Fundamental question on marginal utility
Accepted answer
7 votes

How is marginal utility interpreted as the additional "happiness" gained from consuming one more unit of some good? Not sure what you mean. Utility is not interpreted as some biological ...

View answer
I think hot weather alters firms' desire to sell at some given price because hot weather increases the demand for ice cream. (Mankiw's book)
Accepted answer
6 votes

Yes, you are wrong. As the quoted part explains, In this case, economists say there has been an increase in “quantity supplied” but no change in “supply.” Supply refers to the position of the supply ...

View answer
Is there any academic paper documented about firms' trade credit collection approach?
Accepted answer
1 votes

My hit from Google Scholar (had to go to the bottom of page 1 for this one!) is Macro-Economic Growth,Enterprise Competitive Status and Trade Credit Policy Abstract: This paper investigates the ...

View answer
Is there any academic paper documenting the importance of the Operating Cycle?
Accepted answer
2 votes

I typed "Operating Cycle" into Google Scholar, and got some hits like The Operating Cycle: Risk, Return and Opportunities by John C. Groth Abstract: Highlights the operating cycle, its ...

View answer
What is meant by the sentence in the context of "Monetary Policy in India"?
2 votes

From the first Google hit I got, The tools of macroeconomic policy—a short primer: Macroeconomic policy is concerned with the operation of the economy as a whole. In broad terms, the goal of ...

View answer
Why are cost functions often assumed to be convex in microeconomics?
2 votes

In my very limited empirical experience it seemed that cost functions were in fact non-convex for most output levels in the few industries I looked at. Allocating costs to exact parts of a process is ...

View answer
Solving a system of equations using R
4 votes

Note 1.: It is rude to edit a question after it was answered; I had to make significant edits to make my answer consistent. Note 2.: this is not a system of equations. There are two functions defined,...

View answer
Demand curve is same as Marginal Benefit curve?
Accepted answer
4 votes

Nuance matters: In the comments under 1muflon1's answer the quote given is The demand curve represents marginal benefit. The vertical distance at each quantity shows the mount consumers are willing ...

View answer
A differentiation step in a economic growth model
Accepted answer
3 votes

You have most of this; it seems like you might have a miscalculation when differentiating the fraction: $$ \begin{align*} \frac{dk_t}{dt} = \frac{d\frac{K_t}{N_t}}{dt} & = \frac{\frac{dK_t}{dt}N_t ...

View answer
Production Set: Not satisfying Free Disposal Assumption
4 votes

This is something you can figure out yourself. If you have not yet tried, I encourage you to do so. Draw any set $H \in \mathbb{R}^n $. Select any point $x$ of set. Is the set of all points $y$ "...

View answer
Price level and purchasing power of currency(PPP)
Accepted answer
2 votes

Prices in themselves don't mean much when you want to predict purchasing power. Imagine a loaf of bread costs 100 of country A's monetary units in country A, while it costs 2 of country B's monetary ...

View answer
Showing existence of a Nash equilibrium in pure strategy
2 votes

Seems like this class of games is very general. (Or I don't get the definition.) Note that $\theta$ is not even used, it is just some parameter that has value $\theta_0$ throughout. As long as there ...

View answer
1 2
3
4 5
20