EC 623 Midterm Examination
Instructions: This is an exam. It is due Tuesday, November 20 at
6:30pm. You are free to use any notes, books, or online references you can
nd. Questions about the exam should also be submitted to me by e-mail.
Problem Set 4: Private Provision of Public Goods
1. Three farmers (labeled i = 1, 2, 3) have recognized that any fertilizer
sprayed in their neighborhood is a public good to them. Fertilizer
costs $3 per gallon. The farmersprots, as functions of the amoun
Problem Set 3: Game Theory Review
1. Dene in words the following concepts: dominant strategy, strictly dominated strategy, Nash equilibrium. Then write down formal denitions for
each of these terms.
2. Construct a normal form two player game such that one
Problem Set 2 (Econ 623): Public Goods
1. Auburn and Bama share a house. The house has rose garden. Auburn
and Bama each like looking at the roses. If we denote the number
of roses by x and and the amount of money each has to spend on
other goods by yA an
Problem Set 1: General Equilibrium
1. A household preferences are described by the utility function u(x; y ) =
ln x + ln y .
(a) Derive the marginal rate of substitution function.
(b) Derive the demand function for each of the two goods.
2. A household