Envelope Theorems
Let X Rn for some positive integer n, let T be an open real interval, and let f : X T R.
1
Constraint set depends on t
Let X = Rn , and let g : Rn Rm for some positive integer m. Con
ECN 712 Fall 2009 Professor Schlee Problem Set X, Due 17 November
1. Price discrimination (of the third degree). A monopolist produces a single good under constant returns to scale. It sells the good
ECN 712 Fall 2009 Problem Set XI, Due 24 November
1. MWG, Exercise 10.C.3. (The Herndahl index is often used to measure market concentration.) 2. Consider a Bertrand duopoly game with identical goods.
ECN 712 Fall 2009 Professor Schlee Problem Set XII, Due 1 December
1. Entry. Consider the following two-stage entry game with two rms. In the rst stage, the rms simultaneously decide whether or not to
ECN 712 Fall 2009 Professor Schlee Problem Set XIIa, not to be turned in
1. Evaluate : In a nitely repeated prisoners dilemma, the strategy of defect in every period, no matter what the history is dom
ECN 712: Microeconomic Analysis I
FALL 2009 E Schlee Oce: BAC 553; ph: 965-5745; email: [email protected] Hours: Mainly by appt; walk-in times are Mondays 3-350 and just after class. TA: Ran Shao, Ran
Practice Exam Two
Name
_
Chapter 6
1. The supply curves for the only two firms in a competitive industry are P = 2 Q1 and P = 2 + Q2,
where Q1 is the output of firm 1 and Q2 is the output of firm 2. G
Practice Exam One
Name
_
Chapter 1
1. Residents of your city are charged a fixed weekly fee of $6 for garbage collection. They are
allowed to put out as many cans as they wish. The average household d
Problem Set Nine Solutions
Chapter 13
1. Mountain Breeze supplies air filters to the retail market and hires workers to assemble the
components. An air filter sells for $26, and Mountain Breeze can bu
Problem Set Eight Solutions
Chapter 11
3. Suppose the supply curve of boom box rentals on Golden State Park is given by P = 5 + 0.1 Q,
where P is the daily rent per unit in dollars and Q is the number
Problem Set Seven Solutions
Chapter 9
1. Two car manufacturers, Saab and Volvo, have fixed costs of $1 billion and constant marginal
costs of $10,000 per car. If Saab produces 50,000 cars per year and
Problem Set Six Solutions
Chapter 8
3. John Jones owns and manages a caf whose monthly revenue is $5,000. Monthly expenses are:
Labor
$2,000
Food and drink
500
Electricity
100
Vehicle lease
150
Rent
5
Problem Set Five Solutions
Chapter 7
1. Suppose the weekly demand and supply curves for used DVDs in Lincoln , Nebraska, are
shown in the diagram. Calculate and graph:
a. The weekly consumer surplus.
Problem Set Four Solutions
Chapter 6
3. The Paducah Slugger Company makes baseball bats out of lumber and receives $10 for each
finished bat. Paducahs only factors of production are lathe operators an
Problem Set Three Solutions
Chapter 4
4. Is the demand for a particular brand of car, like a Chevrolet, likely to be more or less priceelastic then the demand for all cars? Explain.
Answer: The price
Problem Set Two Solutions
Chapter 3
2. How would each of the following affect the U.S. market supply for corn? Does the supply
curve shift left or right and why?
a. A new and improved crop rotation te
ECN 712 Fall 2009 Professor Schlee Problem Set IX, Due 11 November
For each problem assume that the monopolist posts a single price (for each good that it sells).
1. A monopolist produces a good accor
ECN 712 Fall 2009 Professor Schlee Problem Set VIII, Due Tuesday, 3 November
1. An investor has initial wealth of w and divides his wealth between a safe asset with a rate of return of 0, and a risky
ECN 712 Fall 2009 Professor Schlee Problem Set VIIa, Additional Practice
For problems 1 and 2, consider the insurance problem in MWG, exercise 6.C.1, with the following change of notation: W is wealth
Demand Properties: Summary
Let u represent a continuous preference relation on RL . In what follows assume that u is + continuous and locally nonsatiated. For (p, w) > 0, dene d(p, w) = cfw_x B (p, w)
The Maximum over a Collection of Convex Functions is Convex
Consider V (t) = max f (x, t)
xC
where t lies in a convex subset T of Rm and C is a subset of Rn , n, m 1. Let a solution exist for every t
Monotone Comparative Statics
Let X and T be subsets of R and let f : X T R. We consider how the set of maximizers of f (x, t) on X vary with the parameter t.
Denition. f satises the strict single-cros
Welfare in the 2-good quasilinear model (or: concave programming and the invisible hand)
Let = (x1 , m1 ), ., (xI , mI ), q1 , ., qJ ) XI RJ = A denote an allocation, where X = R+ R is each consumers
Pareto Optimality
Let A be a set (of alternatives) and cfw_ Optimal if there is no a A with a Suppose that, for each i = 1, ., I ,
i I i i=1 i
a family of preference relations on A. a A is Pareto a fo
The Arrow-Pratt Theorem
For t = 0, 1, let ut be a C 2 vN-M utility with ut > 0 on R+ . And let L be the set of cumulative distribution functions on R+ with F (0) = 0 and F (z ) = 1 for some number z <
Concave Programming
Let f : Rn R for some positive integer n, and let g : Rn Rm for some positive integer m be continuously dierentiable functions. Consider the problem
xRn +
max f (x)
(1)
subject to
Choice Under (Objective) Uncertainty
Primitives: X = cfw_x1 , ., xn , a set of outcomes. L = cfw_p Rn | pi = 1 the set of probability distributions (lotteries) on X. + ei , the element of L that assig
Pratts Theorem on Risk Aversion and Portfolio Demand 1
For t = 0, 1 let ut be a C 1 vN-M utility with positive rst derivative everywhere. Consider the following problem: t arg max0 where xdF (x) > 0,
Nash Equilibrium: Existence
Let G = (N ; S1 , ., Sn ; u1 , ., un ) be a strategic form game with N = cfw_1, ., n. Theorem G has a Nash Equilibrium if, for every i N , (a) Si is a nonempty, compact, co
Extensive Form Games Revised item 7
An extensive form game is a collection = (N, A, H, T, , I, (Ui )iN ).
1. N , a nite set of players. 2. A, a (nite) set of actions. 3. H , a (nite) set of histories