Math Review
MECO 290
Spring 2013
1. Graph the following functions. Be sure to identify the slope and intercept.
(a) y = x
(b) y = 5 + x
(c) y = 5 + 2x
(d) 3y = 6 + 9x
2. Take the derivative w.r.t. x and graph the following functions.
(a) f (x) = x2
1
(b)
Problem Set 9 - due 04/25/13 by 5:00 p.m.
MECO 290 - Microeconomics
Spring 2013
Please show all work.
1. (35 points) Consider an industry with two rms producing an identical product. Each rm has a
marginal cost of 10 and a xed cost of 20. Market (inverse)
Disclaimer
Midterm Review
This is not a 100% COMPREHENSIVE overview.
Microeconomics
MECO 290
Spring 2013
1
Production
Single Input Total Product
f(L)
Production Function:
y = f(L)
y = f(L,K)
Usually 2 Inputs. Usually L and K.
Cobb Douglas
Perfect Com
Sample Questions
MECO 290 - Microeconomics
1. TRUE or FALSE? Explain.
1
2
(a) A rm has the following production technology: f (L, K) = L 4 K 4 . The production expansion path will be a linear ray from the origin.
2
1
(b) A rm has the following production
Problem Set 8 - due 04/18/13 by 5:00 p.m.
MECO 290 - Microeconomics
Spring 2013
Show all of your work for full credit.
1. (25 points) Firms 1 and 2 operate in a market with demand given by: P (Q) = 100
Q.
Each rm has costs given by: C(Q) = 10Q.
Each rm ha
Consumer Choice
Microeconomics
MECO 290
Spring 2013
From Last Class
We characterized what bundles a consumer
can afford.
Previously, we looked at how people compare
happiness from bundles (preferences).
But, (out of the bundles that the consumer
can af
What have we seen?
Oligopoly
Cournot (quantity) competition
Firms choose Q, market determines P
With few enough competitors, P > MC
Stackelberg (sequential) model describes case
where there is a leader firm and a follower firm
Microeconomics
MECO 290
Goals
Oligopoly
We will study quantity and price setting
competition among oligopoly firms. Different
types of competition have very different
predictions for EQLM behavior.
We will discuss how competition is softened
through firms leadership positions,
Sequential Games
Game Theory
A great deal of market activity develops over
time in the real world
One firm makes an announcement (of an action)
and a rival firm takes action after observing the
decision of the first firm
Microeconomics
We may miss impo
Game Theory & Competitive Strategy
Game Theory
Introduce the main concepts and conventions
of game theory
Focus on games with a small number of
possible actions
Microeconomics
MECO 290
Spring 2013
Organize games by their timing
Competitors choose thei
MECO 290 - Problem Set 1
Prof. Daniel Gottlieb
Due Date: January 31 (in class)
1. Zuber Rideshare
Consider the market for cab rides in a metropolitan city in 2027 that is, flying cab rides.
The market is intermediated by a company called Zuber. Zuber cons
MEC 290 - Problem Set 3 Solutions
Daniel Gottlieb
Due Date: March 8 (in class)
Opening a FroYo store
Your cousin is interested in opening a new Frozen Yogurt store and asked you to evaluate
if it would be profitable to enter that market. To open the store
MECO 290 - Problem Set 2 (Solutions)
Daniel Gottlieb
Due Date: February 9 (in class)
1. Subsidies in Real Estate Rental Markets
This exercise goes through a simplified real estate rental market. Suppose that the demand
for houses in a particular city is
2
MEC 290 - Problem Set 4, Solutions
Daniel Gottlieb
Due Date: April 21 (in class)
1
Asymmetric Cournot Competition
An industry has 2 firms producing a homogenous good. Firm 1 is more productive than Firm
2. Their cost functions are:
c1 (y1 ) = 30y1 and c(y