Giskard
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How do I determine PED from price consumption curve with slope of zero?
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2 votes

Since you have discrete datapoints and want to calculate PED, you will have to make assumptions, like "the data represents the general behavior of the consumption function". (You can also ...

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Relation of Engel-curve to income elasticity of demand; is the slope of the Engel-curve equal to the elasticity of income?
3 votes

Homothetic goods is not a widely used term (as far as I know). It is not true that when preferences are homothetic $$ \frac{\Delta x}{\Delta m} = 1 $$ always holds. Instead $$ \frac{\Delta x}{\Delta ...

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Basic question i guess
3 votes

fall in price arising from the labor savings The price of a product is usually determined in part by its cost. (This holds in almost all theoretical models without strict capacity constraints, even ...

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Why min AC = min SRAC at the minima of AC curve?
3 votes

Short-run implies that some decision variable cannot be free set, it is fixed for a time (in the short-run). In the long-run all variables may be freely set. Let us denote the fixed variable by $x$. ...

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What makes a shareholder a "shareholder of record"?
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3 votes

I typed "shareholders of record" into Google, and I got Stockholder of Record Also known as shareholder of record, record holder or owner, or registered holder, or owner. The stockholder ...

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Strike time in a game
6 votes

Calculating a precise strike time without additional details is - in my opinion quite clearly - impossible. On the question of how to do this with additional info/assumptions: A straightforward ...

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Auctions and finding nash equilibrium of a dynamic game
6 votes

You are only required to get Nash equilibria and not sequentially rational/subgame perfect equilibria. Hence Player 2's actions at information sets that do not occur (that do not reflect Player 1's ...

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Can an appreciating currency lead to inflation?
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3 votes

You are wrong/vague here: the rupee (INR), is appreciating against, say, the USD, it possibly means that there is a high demand for the former. If the rupee becomes more expensive w.r.t. the dollar, ...

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Trouble at differentiating a consumption function
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5 votes

This does not seem to have anything to do with calculus. The idea is that the income not consumed $Y_d - C$ is saved (usually denoted by $S$). This saving is then lent out to companies (via banks) who ...

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Why the stock market went up when the currency being weakened?
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1 votes

Quoting from the question When the yen being weakened [...] "The automobile won more order as a result..." and more orders made the automobile sector more profitable, hence the higher ...

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Second order stochastic dominance
7 votes

The answer to 1. Your conjecture is correct. Consider lotteries $A,B$ where $A$ guarantues a payoff of 1 while $B$ yields 0 or 4, each with 50% probability. $B$ does not SOSD $A$, as you can easily ...

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What does negative surprise mean?
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1 votes

(This is an English language question, not an economic one. Next time consider asking at English Language & Usage.) A surprise is negative, if it is a bad surprise (for someone). In this context ...

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external benefit confusion
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2 votes

Not sure I understand your confusion. Fruits provide external benefits worth $X$ to honeybees, honeybees provide external benefits worth $Y$ to fruits. Knowing all this, farmers and beekeepers agreed ...

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Auction Theory: Proving that the found equilibrium is indeed optimal
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5 votes

$$ G(z) (z-x) = \int_x^z G(z) dy $$ and since $G$ is increasing on $[x,z]$, the right hand side is larger than $\int_x^z G(y) dy$.

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Can the theory of the second best mathematically justify labor unions in some scenarios?
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6 votes

Quoting your quote, emphasis altered by me: The “theory of the second best” clearly argues that once markets depart at all from perfect competition, efficiency may well be increased by further ...

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Is there really a Nash equilibrium in this example?
4 votes

You seem to be mistaken in what payoff goes to which player. By convention, the first value goes to the Row player (here P1), and the second value goes to the Column player (here P2).

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Why do most function images take the form of a curve?
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5 votes

Your final line This figure is only for representation. pretty much answers your question. When explaining these concepts you want to draw something that is easy to understand, i.e. does not have ...

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How elastic are markets with regards to unethical companies?
1 votes

Elastic boycotting would imply that the number of consumers boycotting would increase by more than 1% when unethicalness increases by 1%. A proper answer is nigh-on-impossible, as it is difficult to ...

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Lecture notes competitive labor market with minimum wage
4 votes

In the Varian textbook Intermediate Microeconomics (I am guessing in most micro textbooks), the chapter on Equilibrium discusses price controls in the presence of a demand and supply function. You can ...

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Competitive wages under imperfect information
2 votes

Adding major details, such as information asymmetry to the question after answers are posted is poor form in my opinion. In case the original question is lacking - perhaps because too little time was ...

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Why don't governments ban businesses from passing tax costs onto their customers?
2 votes

I don't see how the government taking X% of a business's profits is stopping the business from increasing prices (or is this just the penalty in the enforcement clause?), so I am going ignore that ...

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How to estimate if goods are complementary or substitutes when one good is always offered for free?
2 votes

When estimating something like substitution, I once ran into an issue that though there were price fluctuations, they were very small, it was likely I would observe noise rather than actual ...

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Why don't profitable firms use previous profits to offset current loss
10 votes

It might make sense to cut the jobs as it looks like they will be operating at reduced capacity. The article does not say that they could not keep on the workers and "smooth" their yearly ...

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Should selling price depend on product quality or on work to produce the product if both not in positive correlation?
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32 votes

No one is "right" here, there is rarely a "should" in economics, it is not about morals. When making a purchase, you are usually willing to pay an amount $x$ larger than the price $...

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Can the Certainty Equivalent be negative?
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7 votes

If you start out with €0, then the certainty equivalent of losing €2.5 with probability 1 is -€2.5. Your exercise basically asks you to calculate what difference winning the lottery with a small ...

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Information Partition and Common Knowledge
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3 votes

The situation is not described by $K_A(K_B(3))$. $A$ does not know that the draw was 3, and hence does not know that $B$ thinks it is in the set $K_B(3)$. What $A$ does know is that the draw is in set ...

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Returns to Scale Microeconomics
3 votes

Seems like the only function $f$ that fits your description $$ \forall i: \frac{\partial f(\mathbf{x})}{\partial x_i} = c_i $$ is $$ f(\mathbf{x}) = A + \sum x_i c_i. $$ (Frequently $f(\mathbf{0}) = 0$...

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What additional axiom to GARP do we need to generate a differentiable or smooth utility function
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3 votes

None if the axiom is to be on preferences, as any smooth utility representation can be monotone transformed into a non-smooth utility function.

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Can the Income Consumption Curve have a non smooth shape?
3 votes

An easy example: When the utility function is $$ U(x,y) = \ln x + y $$ and the prices are $p_x = p_y = 1$, the IOC is kinked at income level $I=1$: $$ (x,y) = \left\{ \begin{array}{ll} \left( I, 0 \...

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Slope of the Budget Line
3 votes

They do consider it. The precise mathematical formulation is usually $$ -\frac{p_1}{p_2} = \text{MRS}(x_1,x_2) $$ or $$ \frac{p_1}{p_2} = \left| \text{MRS}(x_1,x_2) \right| $$ in the basic cases, when ...

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