{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

380 Quiz 1 Answers

380 Quiz 1 Answers - -= ∂ 2 What is an indirect or value...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Quiz 1 Economics 380 Name____________________ 1. Economists formalize problems as maximizing or minimizing? For a general objective function 1 2 ( , , ) y f x x z = where 1 x and 2 x are choice variables (endogenous variables) and z is an exogenous variable, what are the first order conditions (calculus) for maximization of y . 1 2 1 1 2 2 ( , , ) 0 ( , , ) 0 f x x z x f x x z x = = Example: 2 2 1 1 2 2 1 2 1 1 1 2 2 2 100 .1 200 1 ( , , ) 100 .2 0 ( , , ) 200 2 0 y zx x x x f x x z z x x f x x z x x = - + - = - = = - = 2. What is an indirect or value function? (you can use the notation in 1. to explain if you wish)
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: -= ∂ 2. What is an indirect or value function? (you can use the notation in 1. to explain if you wish) If x 1 * and x 2 * satisfy the first order conditions, the indirect or value function is * * 1 2 ( , , ). f x x z Example. In the example * 1 500 , x z = and * 2 100. x = The indirect or value function is 2 2 100 (500 ) .1(500 ) 200(100) 1(100) y z z z =-+-...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern