Professor Jay Bhattacharya
Spring 2001
Example: Calculating IEPs and
Engel Curves
Demand II
Find the IEP and Engel Curve for a consumer
with
Recap: last lecture we covered:
Income Expansion Paths and Engel curves
Inferior and Normal Goods
Necessities

Econ 51: Final Exam
June 7, 2004
Instructions: This is a closed book, closed-notes exam. You are allowed to use a hand-held calculator (i.e. no laptop). You have 180 minutes. Please answer all 5 questions. Please use a separate blue book for each question

Econ 51: Final Exam Solution Friday, March 18, 2011
1
Uncertainty and GE (16 points)
probability 0.99, and pays nothing with probability 0.01. If your utility function is strictly increasing in money and you are suciently risk loving, you should buy the t

Professor Jay Bhattacharya
Spring 2001
Preview of Rest of the Course
We have covered consumer decision making and firm decision making. One more lecture on decision making under uncertainty-next Tuesday. The rest of the lectures will focus on how consume

Econ 51: Midterm Exam Solutions
1
Short Questions (28 points, 7 points each)
in two states 1 and 2, respectively. Does the utility function u(x, y ) = 6 + 5x2 + 7y 2 + 14y + 10x represent a vNM preferences? Why or why not? If it does represent a vNM prefe

Economics 202N: Comparative statics
Luke Stein
Stanford University
December 5, 2008
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Introduction
The FOC approach
Monotone comparative statics
Producer applications
Comparative statics
Comparative statics is the study of how endogenous vari

Economics 210, Section 7
Luke C.D. Stein
November 12, 2009
1
Asset pricing with complete markets
For our purposes, the term asset refers to a contractually-guaranteed right to delivery of consumption
goods, with the amount of delivery conditional on the h

Econ 51, Winter 2008
Class #10
Nice performance in the midterm!
PS #4 due Friday; PS #5 posted today
Today: Finish Public goods, and start
Game theory
Econ 51, Winter 2008, Class #10
1
Public Goods
Last time we talked about public goods and why it cre

Econ 51, Winter 2008
Class #9
Hope the midterm wasnt too bad we should have grades for
you by the end of the weekend (before the change of grading basis
deadline).
Regrade request process: check out the course management
policies for details. In particu

Econ 51, Winter 2008
Class #11
PS #5 is long and is due on Friday.
Try to get going on it early.
Today: Continue with game theory,
primarily talking about the concept of
Nash Equilibrium.
Econ 51, Winter 2008, Class #11
1
Game theory
We finished last cl

Econ 51, Winter 2008
Class #12
PS #5 is due Friday.
PS #6 posted today, but much of it relies on stuff
well cover next week. This is the last ps. Its due
two weeks from today, on the day of the last class.
Today: Finish mixed strategies. Start with
seq

Econ 51, Winter 2008
Class #13
Today: Finish sequential and
repeated games. Possibly start with
applications of game theory.
Econ 51, Winter 2008, Class #13
1
Game theory:
Dynamic games
Last time we introduced the new concept of
Subgame Perfect Equilibr

Econ 51, Winter 2008
Class #14
No problem set due this week! But
its time to get going on PS #6.
Today: Applications of game theory
in oligopolistic markets.
Econ 51, Winter 2008, Class #14
1
Game theory:
Applications - Oligopoly
We are done (for this

Econ 51, Winter 2008
Class #15
PS #6 due Wednesday (in class, or to Andreas mailbox by 5pm).
Final next Monday (at Cubberley Auditorium)!
Regular OHs and Sections this week, plus extra OHs over the
weekend.
On Wednesday well do a review: E-mail me wit

Econ 51, Winter 2008
Class #16 (review)
Problem set #6 due (give to me now or after class; or to Andreas
mailbox).
Regular sections and OH this week, plus more OH over the
weekend (see Andreas email).
Please make an effort to submit the course evaluati

Economics 202N: Choice theory
Luke Stein
Stanford University
October 28, 2008
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Introduction
Preferences
Utility
Restrictions
Critiques
Individual decision-making under certainty
Objects of inquiry
Our study begins with individual decision-ma

Econ 51, Winter 2008
Class #7
Reminder: Midterm next Monday
books/notes, but bring a calculator!).
(closed
On Coursework: past midterms and solutions.
Additional notes.
Today: Continue GE with Production, with a
(long) application to the consequences o

Econ 51, Winter 2008
Class #6
Reminders: PS #2 due Friday, PS #3
posted today, Midterm on Feb 11.
Today: Finish up with Walrasian
Equilibrium, then introduce production to
the general equilibrium analysis.
Econ 51, Winter 2008, Class #6
1
General Equili

Externalities
An externality occurs whenever the activities of
one economic agent affect the activities of another
agent in ways that are not taken into account by
the operation of the market.
Examples:
One firm produces down river from another firm. T

The Invisible Hand
Adam Smith argued that the workings of the
market led to desirable social outcomes.
Whoever offers to another a bargain of any kind,
proposes to do this. Give me that which I want, and you
shall have this which you want, is the meanin

Prof. Jay Bhattacharya
Econ 11-Spring 2001
Welfare Properties of Market
Outcomes
The Complexity of General
Equilibrium
Last time, we covered equilibrium in one
marketpartial equilibrium.
We found that under perfect competition, the
equilibrium price and

Econ 51, Winter 2008
Class #1
Welcome!
Be sure to pick up a syllabus and a
tentative class schedule.
Today: course overview, logistics, and a
little bit of actual material.
Econ 51, Winter 2008, Class #1
1
Course Overview
Econ 51, Winter 2008, Class #1

Econ 51, Winter 2007
Class #2
Welcome back!
We have one more TA: Molly Goldstein.
Remember: Regular sections begin this week; PS #1 will
be posted on Wednesday.
TAs OH and section assignments will be posted in the
coming days.
Today: Time and uncerta

Econ 51, Winter 2008
Class #3
PS #1 posted today:
Its neither easy nor short so dont wait until the
last minute to get started.
Dont spend your life trying to solve it. Its only a
problem set after all . If after a reasonable amount of
effort, you feel

Econ 51, Winter 2008
Class #4
PS #1 due Friday.
PS #2 posted today, due next Friday.
Today: Exchange economies (= General
Equilibrium without production).
Econ 51, Winter 2008, Class #4
1
General Equilibrium
(without production)
Econ 51, Winter 2008, C

Econ 51, Winter 2008
Class #5
Today:
Start with mortgage discussion (from PS #1).
Then talk about markets in general equilibrium.
Econ 51, Winter 2008, Class #5
1
Mortgage Choice Discussion
Econ 51, Winter 2008, Class #5
2
General Equilibrium
(without

Professor Jay Bhattacharya
Spring 2001
Motivation for Welfare Analysis
In the last class, we found that the Consumer Price Index (CPI) overstates a "true" cost-of-living. without defining a "true" cost-of-living index. Suppose, H H
Initial situation: New

Economics 202N: Consumer theory
Luke Stein
Stanford University
December 8, 2008
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Part I
The consumer problems
Introduction
Utility maximization
Expenditure minimization
Wealth and substitution
Individual decision-making under certainty
Cours

Economics 202N: General Equilibrium
Luke Stein
Stanford University
December 1, 2008
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Part I
Walrasian equilibria and Pareto optimality
Introduction
Walrasian model
Welfare theorems
FOC characterization
What is general equilibrium?
So far we