Econ 710 Homework 4
More Demand Theory
Fei Li
University of North Carolina at Chapel Hill
September 11, 2014
Due: Sep. 26
1. MWG 3.H.6
2. (JR 2.4) A consumers expenditure function is e (p, u) = up1 p2 / (p1 + p2 ). Find a direct
utility function, u (x), t
ECON 710 - Final Exam - Answer Key
Steve Raymond
1
Q1
First, note that the expected payoffs of both of the assets is 55. Second, note that a portion of the second
asset payoff structure are a mean-preserving spread of the first asset payoff structure, nam
ECON 710 - Midterm 2 Answer Key
Steve Raymond
August 30, 2013
1
Q1
Let g = (1, 0) and b = (0, 1) be the degenerate lotteries associated with receiving either of the two
outcomes with probability one. By assumption we have g b . From the definition of cont
Econ 710 Homework 7
Principal-Agent Model
Fei Li
University of North Carolina at Chapel Hill
September 22, 2014
Due: Oct. 24
1. MWG 14.B.2
2. MWG 14.B.3
3. MWG 14.B.4
4. MWG 14.B.5
5. MWG 14.B.6
1
Econ710 Midterm 1
Fei Li
University of North Carolina at Chapel Hill
September 19, 2013
70 minutes, 60 points, Closed books and notes
1. (5) Commodity space: X = Rn+ . Price vector p Rn+ . A consumers wealth y > 0. Suppose his
preference is strongly monot
Econ710 Midterm II 2013 Fall
Fei Li
University of North Carolina at Chapel Hill
October 21, 2013
60 points, 70 minutes. Closed books and notes
1. (15) Suppose the set of outcome is C = (Cg , Cb ), and the space of all simple lotteries
is L = (C). Any simp
UNC Econ 710 Final: 2013 Fall. 80 points, 90 minutes. Closed books and notes
1. (10) There are two assets: a1 and a2 . The payoff of a1 is $100 w.p. 0.5 and $10 w.p 0.5.
The payoff of a2 is $150 w.p. 0.25, $50 w.p. 0.25 and $10 w.p. 0.5. Suppose the decis
ECON710 Midterm 2 Answer Key
Yi Zhong
October 29, 2014
1
Question 1
(a) The first decision makers preference is consistent with v. N-M expected utility because the
R
R
utility form is linear: U (X) = E(X 2 ) = supp(F ) x2 dF (x) = supp(F ) x2 f (x) dx.
Th
Midterm1 Answer Key
Yi Zhong
September 14, 2014
1
Question 1
(a) No.
We have two groups of demand data:
(1) p = (2, 4), x = (1, 4), and m = 10;
(2) p0 = (6, 3), x0 = (2, 1), and m = 15.
With price and income level of (1), we have:
p x0 = 2 2 + 4 1 = 8 < 1
ECON 710 - HW2 Answer Key
Yi Zhong
September 7, 2014
1
MWG 2.D.1
2 periods with w > 0. Let c = (c1 , c2 ) R2+ denote the consumption vector representing consumption in
both t = 1, 2. Let p = (p1 , p2 ) R2+ be the corresponding price vector.
In period 1, n
Econ 710
Lecture Slides 3.4
Aggregate Demand Theory
Fei Li
University of North Carolina, Chapel Hill
September 7, 2013
Fei Li (UNC)
Lecture 3.4
September 7, 2013
1 / 10
Aggregate Demand
Consider an economy with I utility-maximization consumers.
To what ex
ECON 710 - HW3 Answer Key
Yi Zhong
September 16, 2014
These are not complete answers, but represent general sketches.
1
1.1
3.D.3
A
The question is meant to be show HD1 in w, obviously not in both (p, w), since being HD0 in those is a
requirement of being
ECON 710 - Midterm 1 - Answer Key
Steve Raymond
1
Q1
Since x(p, y) solves the consumers problem, know that x(p, y) = C (B(p, y), ). We also know that x(p, y)
B(p, y), meaning that if x0 x(p, y), then p x0 y.
Use contradiction. Assume Walras Law doesnt ho
Econ 710
Lecture Slides 1
Decision Theory Foundations
Fei Li
University of North Carolina, Chapel Hill
August 27, 2013
Fei Li (UNC)
Lecture 1
August 27, 2013
1 / 32
Introduction
Decision theory (DT) is the study of decision making of a decision
maker (DM)
UNC Econ 710 Final: 2014 Fall. 80 points, 90 minutes. Closed books and notes
1. The following function
e(p, u) = ap1 + bp2 + eu (1 )(1) p1 p21
where a, b > 0 and (0, 1), is a consumers expenditure function in a two-good world for
all u R and prices p R2+