Jae-Yoon Kim
ECON 3104
Microeconomic Theory
1st Homework Assignment (Suggested Solution)
Fall 2016
Problem 1. Carol consumes apples and cookies. Let xa R+ be the amount of apples and
xc R+ be the amount of cookies. (R+ = [0, +] is the set of all positive
Jae-Yoon Kim
ECON 3104
Microeconomic Theory
8th Homework Assignment (Suggested Solution)
Fall 2016
Problem 1. Suppose the market demand is given by D(p) = 14 2p and the market
supply is given by S(p) = 3p 1.
1. In equilibrium, D(p) = S(p), so by solving t
Jae-Yoon Kim
ECON 3104
Microeconomic Theory
7th Homework Assignment (Suggested Solution)
Fall 2016
1
1
Problem 1. A firm produces cookies, and its production function is f (L, K) = L 2 K 3
where L is the level of labor and K is the level of capital. Suppo
Jae-Yoon Kim
ECON 3104
Microeconomic Theory
6th Homework Assignment (Suggested Solution)
Fall 2016
Problem 1. Write down the definition of Pareto Efficiency. Explain why the market (Walrasian) equilibrium is Pareto Efficient using the Edgeworth box.
Ans.
Jae-Yoon Kim
ECON 3104
Microeconomic Theory
3rd Homework Assignment (Suggested Solution)
Fall 2016
Problem 1. Calculate marginal utilities and marginal rate of substitution for utility functions listed below.
Figure 1: Marginal Utilities and Their MRS
Pro
Homework #5
Due date: Monday, October 5th.
Homework #6 consists of two problem sets.
Problem 1
There are two goods 1 and 2. Denote by (x1 , x2 ) the consumption bundle consisting of x1
units of good 1 and x2 units of good 2. Bob loves to consume both good
Homework #6
Due date: Monday, October 19th.
Problem 1
Consider a consumer whose preferences over (c1 , c2 ) state-contingent consumption bundles
are represented by one of the following expected utility functions:
(a) EU (c1 , c2 | 1 , 2 ) = 1 (c1 ) 3 + 2
Homework #1
Due date: Wednesday, September 2nd.
Homework #1 consists of one problem set:
Problem 1
Bart consumes apples and biscuits. Denote by xa R+ the amount of apples and by xp R+
the amount of biscuits. His consumption bundle is denoted by (xa , xb )
Homework #8
Due date:
Wednesday, November 4.
Problem 1
There is a competitive market with for a commodity traded at price
is given by
XD (p) = 100 2p,
the supply function is
1. Derive the inverse demand function
PD (X)
p.
The demand function
XS (p) = 2p.
Jae-Yoon Kim
ECON 3104
Microeconomic Theory
10th Homework Assignment (Suggested Solution)
Fall 2016
Problem 1. A profit-maximizing monopolist produces electricity. Its cost function is
given by C(y) = y 2 . The price of unit electricity is denoted by pe .
Jae-Yoon Kim
ECON 3104
Microeconomic Theory
5th Homework Assignment (Suggested Solution)
Fall 2016
Problem 1. Consider an exchange economy with two consumers: Bob and Carol. There
are two consumption goods. Bob is endowed with (w1b , w2b ) = (10, 0) (i.e.
Jae-Yoon Kim
ECON 3104
Microeconomic Theory
8th Homework Assignment (Suggested Solution)
Fall 2016
Problem 1. There are 100 profit-maximizing firms and they produce cookies. Each firm
1
1
has a production function y = f (L, K) = L 3 K 3 where L is the lev
Homework #9
Due date:
Monday, November 17.
Problem 1
There is a competitive market with for a commodity traded at price
is given by
XD (p) = 100 2p,
the supply function is
1. Derive the inverse demand function
PD (X)
p.
The demand function
XS (p) = 2p.
as
Microeconomic Theory
ECON 3104 Fall 2014
Jae-Yoon Kim
Homework # 8 Solution
Nov. 17, 2014
Problem 1
1
1
1
1
1. f(x) = (x) 3 = 3 x 3 < f (x) = x 3 for all > 1. Thus, this technology shows Decreasing
Returns to Scale.
2. Marginal Product(MP) can be derived
Microeconomic Theory
ECON 3104 Fall 2014
Jae-Yoon Kim
Homework # 5 Solution
Oct. 8, 2014
Problem 1
1. 1) The utility level that a consumer consumes the bundle (2,1) is 4. Thus the equation for
the indifference curve that passes through the consumption bun
Microeconomic Theory
ECON 3104 Fall 2014
Jae-Yoon Kim
Homework # 6 Solution
Oct. 16, 2014
Problem 1
1. 1) He loves to consume both goods in a fixed proportion that is 4 units of x2 for every unit
of x1 . Then the utility consuming from 1 unit of x1 and 4
Jae-Yoon Kim
ECON 3104
Microeconomic Theory
4th Homework Assignment (Suggested Solution)
Fall 2016
Problem 1. Carol consumes apples and cookies. Let xa R+ be the amount of apples and
xc R+ be the amount of cookies. His consumption bundle is denoted by (xa
Jae-Yoon Kim
ECON 3104
Microeconomic Theory
2nd Homework Assignment (Suggested Solution)
Fall 2016
Problem 1. Carol consumes apples and cookies. Let xa R+ be the amount of apples and
xc R+ be the amount of cookies. (R+ = [0, +] is the set of all positive
Homework #2
Due date: Friday, 11th September.
Homework #2 consists of two problem sets:
Problem 1
Bart consumes apples and bananas. He likes both of them. Denote by xa the amount of
apples and by xb R+ the amount of bananas. His consumption bundle is deno
Homework #4
Due date: Friday, September 25th.
Homework #4 consists of two problem sets:
Problem 1
Homer loves to consume scones and donuts. Denote by (xg , xc ) X a consumption bundle
consisting of xs R+ units of scones and xd R+ units of donuts. Homer's
Micro Theory
Micro Theory
Dan Simundza
Spring 2013
2013
Lecture 11 Labor Supply & Time
Something light to begin
Something light to begin
The ACCs
ACC
Circle of
Parity
Parity
Midterm
Midterm 1
Mean 52.8 (59%)
Median 55 (61%)
(61%)
Max
100 (100%)
Very diff
Micro Theory
Micro Theory
Dan Simundza
Spring 2013
2013
Lecture 9 Buying & Selling
Announcements
Announcements
Study groups
groups
Review session tonight!
Toregersen 1060, 6:00
Extra OHs Wed 3-5
Exam: scantron
Bring #2 pencil else youll be stuck wri
Micro Theory
Micro Theory
Dan Simundza
Spring 2013
2013
Lecture 3 Utility
Last time
Last time
Preferences
Start with a binary relation
~
x y: x is preferred at least as much as y
~
Define and ~ from
~
Preferences are complete, reflexive, transitive
Als
Micro Theory
Micro Theory
Dan Simundza
Spring 2013
2013
Lecture 2 Preferences
Consumer theory
Consumer theory
The plan:
plan:
Preferences
Utility
Budget constraint
Optimal choice
Demand
Revealed preference
preference
Slutzky
Consumers make themsel
Microeconomic Theory
Microeconomic Theory
Dan Simundza
Spring 2013
2013
Lecture 1 Introductions
Me
Me
Dan Simundza
Simundza
simundza@vt.edu
Office hours: Wed 3 4, Thur 5 6, & by
appointment
Pamplin 3118
You
You
On paper
paper
Name
Major & year
year
Highes