Giskard
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Non-viable Industry with demand curve above supply curve
1 votes

If we consider that no one wants an infinite number of any material thing other people can supply and that there are only a finite number of people/firms, the demand function should be bounded. That ...

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Real Exchange Rate (Euro/Sterling)
2 votes

Dimensional analysis is useful here. $$\text{RER}=1.58\frac{\text{Euro}}{\text{Sterling}}\cdot\frac{110\text{ Euro}}{118\text{ Sterling}}=1.47\frac{\text{Euro}^2}{\text{Sterling}^2}$$ where the unit ...

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Discounting terminology confusion
3 votes

An answer (I am not sure this is the right one) is if the "positive rate $\rho$" refers to an interest rate. Sometimes interest rates are referred to as discount rates. In this case we would ...

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Cournot oligopoly - first-order condition
3 votes

The gist/shortened and generalized version of the above answer: In the context where $Q = \sum_i q_i$ the equation $$ \frac{\partial \pi_i}{\partial q_i} + \frac{\partial \pi_i}{\partial Q} = \frac{\...

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What's a more accurate term than 'share price' that doesn't depend on (reverse) stock splits?
1 votes

How about "value"? Market capitalization seems fine too.

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Increase in the price of skateboard wheels cause a decrease/no change in the demand of skateboards? (2 separate markets w/ 2 separate buyers)
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2 votes

Since there is no change in consumer preferences, the demand function will not change. The firms supplying skateboards face increased costs due to the wheels being more expensive. This will alter ...

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What is the probability of an unemployed worker receiving no job offer during a time period?
2 votes

Unless I misunderstand the question these seem to be complementing events with probabilities $p$ and $1-p$.

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Does a store suffering increased theft generally cause higher prices?
29 votes

prices should have already been set to maximize the trade off between profit-per-sale and volume sold But profit-per-sale depends on costs, which depends on the theft numbers, so if theft increases, ...

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Are there historical cases of country A printing the currency of country B for the main purpose of economic warfare?
13 votes

David Petruccelli writes in "Banknotes from the Underground: Counterfeiting and the International Order in Interwar Europe" In December 1925, a group of Hungarian nationalists were caught ...

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Doubt about Mixed Strategy Nash Equilibrium
1 votes

why would a player want to balance out the payoffs of another player I don't think anyone is saying that a player wants to do this. But in mixed equilibrium their strategy is such that this property ...

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How does John Stuart Mill distinguish between "wealth" and "riches"?
7 votes

I can only speculate on what Mill meant, but it seems to me that This is mostly a figure of speech. People sometimes say things like "I have no money, but I am wealthy in other ways", ...

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Nash Equilibrium for n-shops Location Game
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5 votes

The following two claims hold in the general $n$-shop case. Claim 1. In equilibrium a shop closest to an edge (0 or 1) cannot be alone. Proof. Such a shop could gain customers by moving slightly ...

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Term for when using a single number is used instead of a function?
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2 votes

A cost function can be constant (in $q$), but this term is not particular to economics.

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Does the theory of contestable markets apply to industries where there is a natural monopoly?
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2 votes

Natural monopolies may exist because the cost structure is such that the market could not sustain two firms. This is usually explained by large sunk costs and relatively small demand - if there were ...

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Increased production costs associated with increased output produced? Why do firms have prices increase with the SRAS or Supply Curve?
2 votes

this is for SRAS and AD, but I'm also going to apply this a bit fo microeconomics.. sorry for mixing, but my question applies in both ways, I believe You are applying market equilibrium logic to the ...

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Are Cobb-Douglas preferences monotone according to the marginal utility condition?
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3 votes

Cobb-Douglas preferences are strongly monotonic over the positive part of the space of baskets, in this case $\mathbb{R}_{++}^2$. Leontief preferences are the usual example for weakly but not strongly ...

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Aggregate income
1 votes

In the profits of the businesses selling fixed assets and raw materials.

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In an intertemporal (2-period) consumption model, why is the investment rate independent of discount factor?
3 votes

This idea is known as the Fisher separation theorem. Without the investment opportunity to transfer $h$ units of present day value into $w(h)$ units of future value, the perfect credit market gives us ...

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elasticity from inverse demand
4 votes

I will denote the demand function by $Q(p)$ and the inverse demand function by $P(q)$. Then $$ \forall q: Q(P(q)) = q $$ so for any $h > 0$ and $q$ we have $$ \begin{align*} p & := P(q) \\ p_h &...

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How dominant assurance contract fix free rider problem?
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1 votes

It was established in the comments that the source of this claim is Tabarrok: The private provision of public goods via dominant assurance contracts via Wikipedia. Tabarrok writes assume that a ...

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In 2020 depression and pandemic, how do retail traders still have money to rally up US stock market?
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1 votes

You seem to be conflating wealth and income. If I am let go from my job, my work income is gone, but not my wealth or my capital income. While most people only have a small amount of money saved (...

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Does the value of a pure strategy Nash equilibrium(if exists) equal the value of the mix strategy Nash equilibrium in two-person zero-sum game?
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4 votes

Pure strategy Nash equilibria are a subset of mixed strategy Nash equilibria, so as long as your statement a mixed strategy Nash equilibrium always exists and all such equilibria have the same ...

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Certainty Equivalent
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5 votes

How can someone claim that this return is guaranteed, since we need to use $\mathbb{V}ar(\widetilde{W})$ to measure the utility gain of an individual? Maybe I misunderstand your point, but though $\...

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Calculating CPI
2 votes

The next sentence of the question instructs you to ignore the "700 goods and services" and focus only on meat and movie tickets.

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Bananas and oranges in communist countries
1 votes

You seem to be a native English speaker, and that implies you probably earn more than I do. (Trust me on this.) Do you want to buy my rocking chair, car or flat? While these are all possible options, ...

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Whether a good is a Giffen good should be based on circumstance?
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3 votes

Yes, whether a good is a Giffen or inferior good depends on "the circumstances", or to be more narrow, it can depend on the income and price levels. Claim 1. Being an inferior good is a local ...

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why is market clearing price assumed in cournot model with homogenous products
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2 votes

[...] One way to interpret this result is to see our two-stage game as a mechanism to generate Cournot-like outcomes that dispenses with the mythical auctioneer. A justification is given in ...

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When a land lords sells to an owner occupiers does it push up rents?
3 votes

Your argument is sound (as a first approximation). In fact this is one of the basic examples discussed in chapter 1 of Varian's Intermediate Microeconomics (a standard textbook). Suppose that a ...

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What are the benefits of reducing zeroes from currency (eg: Iran)?
3 votes

Instead of the word "benefit" I prefer to use the old Saxon word "bebebebebebebebebebenefit". Some people say using the shorter word has bebebebebebebebebebenefits, but I don't see any. P.s.: coins ...

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Mixed dominance game theory
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2 votes

The text says domination is "in the game remaining after one stage of elimination". In stage one, column L can be eliminated. As this is exercise b., I am guessing that was exercise a.

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