If you have in mind infinite populations I'd suggest Carlos Alós-Ferrer (1999) Dynamical Systems with a Continuum of Randomly Matched Agents, Journal of Economic Theory 86 (2), 245-267.

There is most likely an assumption in the background that utility is increasing in the amount of flour, independently of its packaging. Then you are willing to exchange two 1kg-bags of flour for one ...

Assuming $u(x)=u(y)$. I am to prove or disprove that $x \succcurlyeq y$. Proof: The utility function $u$ represents your preferences $\succcurlyeq$ over consumption bundles. By definition of the term ...

How is marginal utility interpreted as the additional "happiness" gained from consuming one more unit of some good? It is not. While it sounds somewhat intuititve, the concept of utility as ...

Increasing and convex costs are a result of decreasing returns to scale. These are mainly due to the limited availability of (local) input factors. Other contributing factors are the decline of ...

Usually one tries to construct a Social Welfare Function (SWF), i.e. a general rule how to aggregate individual preferences to a social preference relation. Then various axioms are formulated that a ...

This might just be a misunderstanding. The textbook contains various passages like e.g. "An alternative approach holds real income (or utility) constant while examining reactions to changes in $... View answer 3 votes Given that you already know the welfare maximizing level$h=5$from your previous question, another approach would be to just consider that any optimal take-it-or-leave-it offer can be divided into ... View answer 3 votes In the context of labour supply. The Wikipedia page on it offers the following explanation: As wages increase above the subsistence level [...], there are two considerations affecting a worker's ... View answer Accepted answer 3 votes Let's say there are individuals 1 and 2, and alternatives A, B, C, and D. Society uses the Rawlsian SWF and thus ranks alternatives according to their maximal rank within individuals' rankings. Denote ... View answer Accepted answer 3 votes If you want "both don't clean" to be a Nash equilibrium (NE), then your payoff matrix doesn't work. With those payoffs, cleaning is a strictly dominant strategy and "both clean" is ... View answer Accepted answer 3 votes The terminology in microeconomics is not completely unified but typically differs slightly from the mathematical one. For a real-valued random (outcome) variable$X$, the mathematical expected value$\...

Yes, for the standard case of a strictly decreasing demand function $Q(p)$ and price-elasticity of demand $\epsilon_p(Q)=Q'(p)\frac{p}{Q(p)}$ the inverse demand function $p(Q)$ exists and by the ...

The (Hicks-) substitution effect is by definition the change in consumption of X induced by a change of the relative prices, holding utility fixed. Thus, the original budget line is "rolled along" its ...

tl;dr: Prices are identical because firms are identical. Profits of firm $i$ depend on own price $p_i$ and on neighbors' prices $p_{i-1}$ and $p_{i+1}$. Prices are set simultaneously, therefore ...

Figure 2 is a bit misleading. Both demand curves have an elastic and an inelastic region, just like the one in Figure 1. The meaning of "High elasticity " and "Low elasticity" in Figure 2 is that the ...

First look at the shape of the indifference curves. (I assume that $f$ is a utility function here.) The better-sets are convex, so this is consistent with quasi-concavity of the function $f$. Second, ...

That's actually just a convention. While these two methods to partition the total effect lead to different results for any discrete price change, they coincide in the limit of an infinitesimal price ...

We don't use the EUT for comparing lotteries with close probabilities, except if we are solving an exercise involving an Allais paradox type of question. We don't actually use it at all if we are not ...

Think about the incentives of player $i$: If he knew that no one else helps, he'd want to help. If he knew that at least one other player helps, he'd rather not help. A single player helping would ...

In your maximization problem the resident chooses the level of pollution $u$. If he can really do this then the maximization problem has no solution, since $U$ becomes infinite for $u\rightarrow 0$. I ...

This seems to be specific to the CFA exam and is a badly formulated question. First, an indifference curve for some fixed utility level can be viewed as a function mapping $\sigma$ to $\mu$. At any ...

Almost correct. Setting $W(h)=0$ is wrong (but inconsequential for the solutions). Checking the SOC for completeness should be included, but is somewhat obvious here. Correctness of 3. holds only ...

"Sellers" as a whole indeed do not have a reason to decrease the price under these conditions. But sellers don't decide together collusively, acting like a monopoly seller. Instead, each of ...

This depends on the kinds of beliefs players can have about their opponents’ play. If opponents' strategies can be correlated, then the strategies surviving IESDS are exactly the rationalizable ones. ...

I think what you are looking for is known as overselling.

Yes. In general not. Let's say the individual has initial wealth $W$ and the gamble $g$ has payouts $0$ and $G$, each with probability $1/2$. As you say, the certainty equivalent $C$ of the gamble is ...

Let $f(U)=U^{6/5}$. This is a positive monotone transformation of $U$ on $\mathbb{R}_0^+$. So the preferences represented by $U$ are also represented by $V(x_1,x_2):=f(U(x_1,x_2))=x_1^{3/5}x_2^{2/5}$. ...