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Unformatted text preview: ECON 121b Winter 2011 Instructor: Professor Eduardo Faingold Grader of the Problem Set: Noam Tanner ( [email protected] ) Solutions to Homework Assignment #1 Note about Textbook: ǲ¡¢ £¤ ¥¦§¤¨ ¨©ª«ª¬ ¢ª ¤¢£«¢ ª« ®ªª¯¤Ǥǳ Ȅ Paul Samuelson, Nobel Laureate in Economics (1970) The textbook for this course is fantastic. It is clearly written, provides illuminating examples, and contains very interesting applications of the material taught in this course (it contains applications to asset markets, auctions, information technology, and more). If you intend to major in economics (or are already a major) it is a great reference text. The author of this book, Hal Varian is not only a wellrespected academic, but is also the current Chief Economist at Google. About the Solutions: For problems 1 and 2, I gave a short solution with the work that will give you full credit and then provided a longer, more chatty explanation. °ª± ²±ª®§¨¬ ͵ǡ £¢ǯ¤ all chatty since the result is a real worksaver and could help you later in this course (and on exams!). Question 1 : Short Answer: x = (1, 1), y = (2, 1), z = (2, 2). ³ غ and غ ´ǡ but WE DO NOT HAVE that ³ غ ´ , which would be required for transitivity. µª ¶§¦«©·¨ǯ¤ ²±¨¥¨±¨«©¨ǯ¤ ¦±¨ ¸¹º ¢±¦«¤£¢£»¨Ǥ Long Answer: This problem is an exercise in understanding abstract concepts and analyzing concrete examples. Like surviving horror and zombie films, solving abstract problems requires a careful adherence to certain rules. RULE #1: Understand the objects under analysis. Differentiate between the informal ሺǲ±¨¦§ ¼ª±§½ሻ ª®¾¨©¢¤ ®¨£«¿ ¬ª½¨§¨½ ¦«½ ¢·¨ ¥ª±¬¦§ ሺ¬¦¢·¨¬¦¢£©¦§ሻ ª®¾¨©¢¤ À«½¨± study. Yes, Blanche is evaluating the boys in here economics class. The boys are clearly the real word objects . But Blanche is reducing each boy in her class to two numbers: an intelligence score and a looks score. She is taking each boy and turning them into an ordered pair, ( a 1 , a 2 ) ǡ ¡¢£¤£ ¥¢£ ¦§¤¨¥ ©ª¤§ª«¬£ ¤£¤£¨£®¥¨ ¥¢£ «¯°ǯ¨ §®¥£¬¬§±£®²£ ¨²¯¤£ ሺ§¥ǯ¨ ³ª¬£ ¨¯ §®¥£¬¬§±£®²£ ²¯´£¨ ¦§¤¨¥ሻ ª®µ ¥¢£ ¨£²¯®µ ©ª¤§ª«¬£ ¤£¤£¨£®¥¨ ¥¢£ «¯°ǯ¨ ¬¯¯¶ score. For example, (1, 3) would represent a boy with an intelligence score of 1 and a look score of 3: a stupid, but very goodlooking guy (by Yale economics standards, of course). When Blanche compares two guys following this procedure she is essentially comparing different ordered pairs. These ordered pairs are the formal objects . More formally, Blanche compares Andrew to Bill, she is comparing a = ( a 1 , a 2 ) to b = ( b 1 , b 2 )....
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 Spring '09
 SAMUELSON
 Economics, $100, X1, [email protected]

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