An exercise in macroeconomics:
Recall that in ECO 1002 or any other intro macro, total consumption expenditure is a function of disposable income (or after-tax
income). Specifically, we have:
Consumption = a con
Chapter 1-3 Notes
- Whats happening in the real world?
o Federal Reserve Meeting
Meets 8 times a year
Meetings usually about interest rates (federal fund rate)
Interest rate increasing 1% to 1 %
o Federal Fund Rate (controlled)
Rate at ban
Chapter 5 Notes 6/19/17
- Amazon buys Whole Foods
o Last 2 years Stores + stock price not doing well
- Stocks represent ownership in a company
o (Market value of a stock) x (# of stocks outstanding) = $ [company worth]
- Amazon buys a premi
Chapter 1 Notes
Scarcity: inability to get everything we want
What society can get is limited by the productive resources available
Incentive: reward that encourages an action or a penalty that discourages one (e.g.
Microeconomics : study of the c
Factors of production:
Land -natural resources
Labor - the work time and work effort of people
Capital - tools, instruments, machines, buildings
Entrepreneurship - human resource that organizes labor, land and capital
Capital- is the tools, instruments, machines, buildings, and other items that have been
produced in the past and that are used today to produce goods and services.
(money, money to buy business, to buy machinery, you need capital in your busines
Chapter 4 Notes 6/15/17
- Janet Yellen Head of Federal Reserve
- Federal Reserve raised federal fund rate by 1% to 1 1/4%
- [Great Recession 07-10] Quantitative Easing (QE 1,2,3 all the same)
o Quantitative Easing (QE)
Purchase huge (trill
Game theory provides a structured language that helps analyzing interactive situations,
that is, when several individuals have to take decisions and the outcome (and the individuals welfare) depends on each persons choice. This chap
1. In the game above, if 2 = (p,1-p), for what value of p is player 1 indifferent between playing A and
C. For this particular value of 2, what is BR1(2)?
2. In the game above, what is B1?
2. In the game
1. In the game above, what is the expected utility of player 2 for 2 = (0,1,0) and 1 = (1/3, 1/2, 1/6)?
2. In the game above, what is the expected utility of player 1 given strategy profile 1
1. In the game above, dene the strategy space for each player.
2. How many strategy proles exist in the game above? Prove one example of a strategy prole.
3. prlayer 3 gets to take an action in the game above, what does he know about the actions that have
1. In the game above, what is the rationalizable set?
2. In the game above, what is the rationalizable set?
1. In the game above, identify the (pure strategy) Nash equilibria.
2. In the game above, identify the strict Nash equilibria.
3. Consider a location game with two players competing over
1. Find all Nash equilibria of the game above.
2. Find all Nash equilibria of the game above.
3a. In the game above, describe the set of Nash eq
An annual health insurance contract is priced at p. The individual pays p to the insurer, and the insurer
provides coverage of medical expenses. The individual is either healthy or has a pre-existing condition,
but the insurer cannot observe the i
1. Consider a game in which, simultaneously, player 1 selects a number x between 0 and 6, and player
2 selects a number between 0 and 6. The payoffs are given by u1 = 16x/(y+2) x2 and u2 = 16y/(x+2)
y2. What is the Nash equilibrium values of x and
Represent the following game in extensive form. There are three players, numbered 1, 2, and 3. At the
beginning of the game, players 1 and 2 simultaneously make decisions, each choosing between Odd
and Even. If they both choose Odd, then the game e
Extmalz'ties and Public Good: ionising
c. What are the efficient prices and quantities?
"- f _
. M be - ? <7 cfw_3 75
tion is there at the efcient prices and
d. In percentage terms, how much less pollu
quantities" than at the competitive on
44 Perloff * Microeconomics: Theory and Applications with Calculus, Second Edition
55. Recall that e: (dQ/depiQ) and that (indp) is the derivative of the demand equation. Thus we
need to nd where 3(piQ) equals each of these totals. Substituting in (300 -
354 Perloff 0 Microeconomics: Theory and Applications with Calculus, Second Edition
The resource should go to its highest valued use, irrespective of initial property rights. If the
farmer initially has the property rights, the rancher will buy them
Additional Practice Question for Final
ACC 2203, Spring 2016
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the
store's operations follow:
- Sales are budgeted at $330,000 for November, $340,000 for Decemb
368 PARTV PERM BEHAVIOR AND THE ORGANlZATEGN OF INDUSTRY
4. Consider trade relations between the United States If only one of you works hard, you both get 313,: 3 _ '3
and Mexico. Assume that the leaders of the two coun- which gives each of you 30 u
Homework Chapter 3
3.1 For each of the following utility functions, (i) graph at typical indifference curve, (ii)
find MUx and MUy and determine whether they are positive for positive values of x
and y, and (iii) find MRSxy and determine whether it dimini
Department of Economics and Finance
Baruch College, City University of New York
Spring 2017 Economics 4100 Syllabus Professor Larry Huckins
E-mail: [email protected]
Office: Room 231 (enter through 226; knock if locked
Answer Key to Practice Quiz Ch. 1 to 3 Mankiw
1. B 2. C 3. C 4. C 5. C 6. A 7. D 8. D 9. A 10. D
11. D 12. D 13. A 14. B 15. A 16. D 17. A 18. A 19. C 20. C
21. C 22. C 23. A 24. C 25. A 26. D 27. B 28. C 29. C 30. D