ECON 6090, Fall 2011 - Problem Set 6 Solution
1 (a) A strictly dominates E.
e strictly dominates a and d.
A strictly dominates B.
The rest are strategies that survive iterated elimination
of weakly dominated strategies.
(b) Pure strategy NE is (C,c).
2 (a
Problem Set Five, ECON 6090
Due: November 11th, 2011
1. (a) p = 1 ( 1 )
3
(b) Suppose the rm sells to all consumers with a value v or higher.
Note rst that v 2 as any higher value leaves water unsold for al
3
states of the world. If rationing occurs (i.e.
Econ6090 Problem Set 4 Solutions
November 5, 2010
We know that in the usual case, a sucient condition for aggregate demand to depend
only on aggregate wealth is that consumers' preferences can be represented by a Gorman form
indirect utility function with
Econ6090 Fall 2010, Problem Set 2 Solution
Question 2:
If youre wondering what we were expecting from you, the goal of the question was to get you to
look at the proof in MWG that uses strict monotonicity and think about how to extend it. The
follow
Problem Set Five, ECON 6090
Due: November 11th, 2011
1. Suppose you are the owner of the sole utility that provides water to a
unit mass of consumers in Ithaca. Assume that consumers can consumer
either 1 unit of water or 0 units of water (but cannot cons
Economics 202
Core Microeconomics
Solution Set for Choice Theory (P.S. 1)
1
1.1
Transitivity
If
is transitive then
is transitive.
We assume is transitive, and that x y and y z , and try to show x z .
Now, x y x y . Similarly, y z y z . Since x y , y z , a
ECON 6090 - Final Exam Solutions
1. Solve with pretty pictures. But here are some notes.
(a) Note here that we only assumed nonsatiation, not monotonicity! Luckily nonsatiation gives us Walras law. Given
s
wealth of 5 we know
53
p2 =
p1
22
From WARP we ha
ECON 6090, Fall 2011 - Midterm Two Solution
1 (a)
L = x x1 + (w p1 x1 p2 x2 )
12
Foc:
x1 x1 p1 = 0
1
2
(1 )x x p2 = 0
12
w p1 x1 p2 x2 = 0
From this it follows
x1 (p, w) =
x2 (p, w) =
w
p1
(1 )w
p2
(b)
v (p, w) = (1 )1
w
=u
p p1
12
1
p p1 u
(1 )1 1 2
1
p
ECON 6090, Fall 2011 - Problem Set 6 Solution
1 (a) A strictly dominates E.
e strictly dominates a and d.
A strictly dominates B.
The rest are strategies that survive iterated elimination
of weakly dominated strategies.
(b) Pure strategy NE is (C,c).
2 (a