Microeconomics (Fall 2016)
Simon W. Bowmaker
Problem Set 2
Submit at lecture on Monday, September 26
Write (they dont have to be typed) your answers on separate paper, not on this sheet of paper.
Please include:
your name
your recitation teachers name

Microeconomics (MA): Problem Set 4
(Due February 26, 2015; at recitation)
1. CES revisited. This problem builds on the ndings of Problem 2 in PS3. You are
encouraged to use your ndings in PS3 when solving this problem. Consider a consumer
with a CES utili

Microeconomics
Key to sample midterm 2015
Professor Dubra
Part I:Short Answer Questions
1. [4pts] Write down in detail the three axioms that a preference relation should satisfy
in order to be rational.
completeness
transitivity
monotonicity
2. [4pts] The

Practice Problems 1
Juan Dubra
1. Find all x R such that 2x +3x =12, and draw the set. In the same diagram, draw the
vector (2,3). In the same diagram, draw all x R such that 3x +3x =12 and all
x R such that 4x +3x =12. Draw also the vectors (3,3) and (4,

Practice Problems 2015 with solutions
Professor Dubra
E 1:
Suppose that the utility function for radio shows R and cd listening C is:
U (R, C) = R2 C 5
Step 1: Get M RSR for C
Step 2: nd optimal R and C
E 2:
Suppose that U (R, C) = 4R + C, and that pR = 1

Department of Economics
Microeconomics, Spring 2015
Problem Set 2
Professor Dubra
Part I
1. Suppose that Ellen has $I to spend on goods x and y: The price of good x is p x and
the price of good y is p y : Write down Ellen's budget line and draw it. Indica

Department of Economics
Microeconomics, Spring 2015
Problem Set 3
Professor Dubra
Part I
The price of art is p a and the price of books is p b .
Find MRS a ,b
Set MRS a ,b =
4b
a
MRS a ,b
pa
pb
pa
pb
Set up budget constraint
I
pa a
b
I
5 pb
a
4
5
pb b 5 p

General Equilibrium
Reading for this lecture: J&R 5.1, 5.2, 5.3.
A new homework will be posted after the class.
A. Adachi (NYU)
Microeconomics
2015
1 / 17
Overview
The purpose of this section is to examine the performance of the economy
as a whole with ma

CALIFORNIA INSTITUTE OF TECHNOLOGY
Division of the Humanities and Social Sciences
Introductory Notes on Preference and Rational Choice
KC Border
April 2012
v. 2014.11.10:16.08
Contents
1 The concept of preference
2
2 A digression on binary relations
3
3 G

An Almost Ideal Demand System
By ANGUS DEATON AND JOHN MUELLBAUER*
In Section II, the model is estimated on
postwar British data and we use our results
to test the homogeneity and symmetry restrictions. Our results are consistent with
earlier findings in

Readings for this week: J&R 1.4, 1.5; N&S Ch. 4 - 6;
On Consumer Surplus N&S Ch. 5
You can start MWG Chapter 6 on Choice Under Uncertainty (posted
on website).
A new Homework will be posted tonight.
A. Adachi (NYU)
Microeconomics
2015
1 / 17
Utility Maxim

Decision Making under Uncertainty
Todays presentation is based on Chapter 6 from Mas-Colell, Whinston
and Greens Microeconomic Theory; relevant part is posted on course
web-site.
I do not recommend reading J&R on this topic (notation and axiomatic
represe

Announcements:
Problem Set 2 will be posted later today: please submit hand-written
solutions at the recitation next week;
Readings for this week:
J&R: 1.2, 1.3, 1.4;
N&S Chapters 3, 4;
A. Adachi (NYU)
Microeconomics
2015
1 / 19
Preference Relations
Binar

CHAPTER 2
MATHEMATICS FOR MICROECONOMICS
The problems in this chapter are primarily mathematical. They are intended to give students
some practice with the concepts introduced in Chapter 2, but the problems in themselves offer
few economic insights. Conse

Microeconomics (MA): Problem Set 3
(Due February 19, 2014; at recitation)
1. This is an extended version of Exercise 1.54 from J&R.
The n-goods Cobb-Douglas utility function is
n
xi ,
i
u(x) = A
i=1
where A > 0 and
(a)
(b)
(c)
(d)
(e)
n
i=1
i = 1.
Derive

Game Theory
The exposition of todays class will follow N&S textbook, Ch. 8.
The following topics will be surveyed:
1 Static games with complete information, and Nash Equilibrium
1
2
2
Pure strategies;
Mixed strategies;
Dynamic games with complete informat

Microeconomics (MA): Practice Problems for
Prot Maximization and Perfect Competition
1. J&R 3.52 (you might need to review some proofs from the consumer theory chapter to
complete this exercise);
2. J&R 3.54;
3. J&R 4.7;
4. J&R 4.26;
All the problems are

Microeconomics (MA): Problem Set 1
(Due February 5, 2014; at recitation)
I will use the symbol R for any binary relation on a set X (e.g. xRy stands for element
x is in the relation R with element y where x X, y X). Remember, to be called a
binary relatio

Microeconomics (MA): Problem Set 2
(Due February 12, 2014; at recitation)
1. Cite a credible example where the preferences of an ordinary consumer would be
unlikely to satisfy the axiom of convexity.
2. Suppose the preferences
(a) Show that
are represente

Microeconomics: Lecture 11
Costs
and the Choice of Production Quantity
1
Producer Theory: Roadmap
Building Blocks:
Part I: Production
Production One Input Case
Technology
Part II: Production
Production Two Input Case
Marginal Rate of Technical Substit

Microeconomics (MA): Problem Set 5
(Due March 5th, 2015; at recitation)
1. Prove the converse of Expected Utility Theorem: Suppose the preference relation
over the set of simple lotteries with n outcomes has expected utility representation.
Demonstrate th

Microeconomics (MA): Problem Set 6
(Due March 12th, 2015; at recitation)
1. N&S 9.5; (you can refer to 9.9 for denitions of elasticities).
2. N&S 9.6;
3. N&S 9.9;
4. N&S10.4;
5. N&S 10.9
All the problems are based on 11th edition.
1

Microeconomics (MA): Problem Set 7
(Due April 9th, 2015; at recitation)
1. J&R 5.11
2. Consider an economy with two goods and a single rm with a production set
Y = cfw_y R2 : y1 + y2 100, 2y1 + y2 150
+
(a) Illustrate the production set graphically.
(b) S

Microeconomics
Key to sample midterm 2015
Professor Dubra
Part I:Short Answer Questions
1. [4pts] Write down in detail the three axioms that a preference relation
should satisfy in order to be rational.
2. [4pts] The nominal (current-dollar) price of a la

CHAPTER 6
DEMAND RELATIONSHIPS AMONG GOODS
Two types of demand relationships are stressed in the problems to Chapter 6: cross-price
effects and composite commodity results. The general goal of these problems is to
illustrate how the demand for one particu

CHAPTER 7
Uncertainty and Information
Most of the problems in this chapter focus on illustrating the concept of risk aversion.
That is, they assume that individuals have concave utility of wealth functions and
therefore dislike variance in their wealth. F

Microeconomics: Lecture 18
Choice and Uncertainty
Today: Introduce
Uncertainty and Risk
Building our toolkit for the remainder
of the class:
Probability and Uncertainty
Preferences Toward Risk
A short review of probability,
with real decisions
In the

Microeconomics: Lecture 8
Producer Theory: Part I
Producer Theory: Roadmap
Building Blocks:
Roadmap for Part I:
Lecture 8
3
Introduction
We have completed a 4-part analysis of consumer
behavior:
Consumer preferences
Consumers budget constraints
Utility

Microeconomics: Lecture 9
Producer Theory: Part II
Producer Theory: Roadmap
Building Blocks:
Producer Theory: Part I
Firms as purposeful agents
Production function
Associated with a particular technology
Consider one input case (labor)
Marginal produ