Intermediate Microeconomics: Market
Failure
February 21, 2013
Introduction
So far we have taken for granted that private benets and costs
are aligned with societies benets and costs.
This is not the case in most situations in the real world.
Consider poll
Problem Set 1 Intermediate Microeconomics 73-230
Due: 20th of February.
1
In this question you are to compare two regimes for educational choice. A household can
purchase a composite good or higher levels of quality of education with its income Y .
Let th
73-240 Fall 2014
73-240 Problem set 2 Answer Key
Problem 1 (30 points): The US household
In this problem you will study the representative household. Suppose that the utility function
is given by
1
U (C, l) = log(C) + log(l)
Where C is consumption, l is l
Quiz 2
Intermediate Microeconomics 73-150
Problem 1
If the consumers budget constraint is given by 10F + 5S = 100 where F is food and S is shelter,
how much food can she buy if she purchases 2 units of shelter?
a. 10 b. 5 c. 20 d. 9 e. None of the above.
Intermediate Macroeconomics - 73240
September 26, 2014
Sample Midterm
Name:
User Name:
1
73-240 Fall 2014
Short Questions
Before you begin, check that you have all the pages and write your name! Good luck!
Question 1:
Describe what is the Laer curve. Is a
Recitation 1
Practice Problems
Quick Recap
GDP is the market value of all final goods and services produced
in the economy in a given period.
GDP product approach,
Y =
X
V Ax
xX
GDP expenditure approach,
Y = C + I + G + NX
GDP income approach,
GN P = Nati
MACROECONOMICS
73-240
Lecture 4
Shu Lin Wee
This version: September 12, 2016
A puzzle in the data
Average wage growth has been sluggish, about 0.12% in Aug 2016
compared to Jul 2016
Average hourly earnings up 2.4% over the last year
What do we mean when w
MACROECONOMICS
73-240
Lecture 5
Shu Lin Wee
This version: September 14, 2016
Plan for This Lecture
1) Finish up talking about the Household
2) The Firm
The representative firm
The production function
3) Firm maximization
Note: with this lecture we finish
MACROECONOMICS
73-240
Lecture 2
Shu Lin Wee
This version: August 31, 2016
Reminder
Friday Sep 2: Make-up Lecture instead of Recitation
Wed Sep 7: No class
Friday Sep 9: Recitation, HW 1 due.
Recent Economic News
Second estimate of 2016Q2 recently released
MACROECONOMICS
73-240
Lecture 3
Shu Lin Wee
This version: September 2, 2016
Whither inflation?
PCE price index (implicit price deflator for consumption
expenditures): no change in July from Junes reading
> 4 years below Federal Reserves inflation target o
MACROECONOMICS
73-240
Lecture 1
Shu Lin Wee
This version: August 29, 2016
Intermediate Macroeconomics
Preliminaries
What is expected
What to expect
The syllabus
Make sure to get and read the syllabus
Details about the course
The class: MW 1:30-2:50 / 3:00
73-240, Fall 2014: Notes for recitation 4
TA: Ben Tengelsen
Problem 1 (20000 points) Measuring GDP
Use your knowledge of GDP accounting to calculate the GDP of the simple economy below via the product
approach:
Firm
Alcoa
US Steel
Boeing
Demuth Propellers
MACROECONOMICS
73-240
Lecture 8
Shu Lin Wee
This version: September 21, 2014
Plan for this Lecture
Unemployment
U.S. Labor Markets
Adding Unemployment to Our Model
The Concept of a Steady State
Unemployment
Unemployment
So far, we have only studied hours
73-240 Fall 2016
73-240 Problem set 1
Due Friday Sep. 9th
From the Syllabus:
1. Homework must be turned in on the day it is due (usually on a Friday) in the undergraduate program office in Tepper 139 by 430pm sharp. Do NOT leave it under
my office door. L
73-240 Fall 2016
73-240 Problem set 2
Due Friday Sep. 16th
From the Syllabus:
1. Homework must be turned in on the day it is due (usually on a Friday) in the undergraduate program office in Tepper 139 by 430pm sharp. Do NOT leave it under
my office door.
73-240 Fall 2016
73-240 Problem set 1, Answer Key
Due Friday Sep. 9th
Problem 1: Getting Started, Using Logarithms
When calculating GDP growth rates, economists like to use the dierence in the natural
logarithm of GDP as an approximation for an economys g
73-240 Fall 2016
73-240 Problem set 3
Due Friday Sep. 23rd
From the Syllabus:
1. Homework must be turned in on the day it is due (usually on a Friday) in the undergraduate program office in Tepper 139 by 430pm sharp. Do NOT leave it under
my office door.
MACROECONOMICS
73-240
Lecture 8
Shu Lin Wee
This version: September 26, 2016
Slide 1 of 48
Plan for This Lecture
1) How good are competitive equilibrium outcomes?
Pareto optimum
Welfare Theorems
Slide 2 of 48
Efficiency: Pareto Optimality
Slide 3 of 48
73-240 Fall 2015
73-240 Problem set 8
Due Friday Dec 4th at 430pm
Problem 1: The Diamond Dybvig Model
Consider the Diamond-Dybvig model discussed in class. There are three periods: 0, 1, and
2. The economy consists of a large number, N , of consumers, eac
73-240 Fall 2015
73-240 Problem set 5
Due Friday Oct. 23rd
Problem 1: Growth Projections (4 pts)
For this question, we want to project where the US economy will be in the future and how
it will compare to its neighbor Mexico.
a Compute the average annual
Intermediate Macroeconomics - 73240
October 2, 2015
Practice MIDTERM
Name:
User Name:
1. This exams contains 7 pages.
2. The final answer must be written in the space provided.
3. The exam lasts 50 minutes. You may leave after 40 min.
4. Define any notati
73-240 Fall 2015
73-240 Problem set 1, Answer Key
Due Friday Sep. 11th
Problem 1: Getting Started, Using Logarithms (5 pts)
When calculating GDP growth rates, economists like to use the dierence in the natural
logarithm of GDP as an approximation for an e
Intermediate Macroeconomics - 73240
October 5, 2016
MIDTERM I
Name:
User Name:
1. This exams contains 14 pages.
2. The final answer must be written in the space provided.
3. The exam lasts 80 minutes. You may leave after 70 min.
4. Define any notation you
73-240 Fall 2016
73-240 Problem set 4
Due Friday Oct. 14th
From the Syllabus:
1. Homework must be turned in on the day it is due (usually on a Friday) in the undergraduate program office in Tepper 139 by 430pm sharp. Do NOT leave it under
my office door.
MACROECONOMICS
73-240
Lecture 11
Shu Lin Wee
This version: October 12, 2016
Plan for this Lecture
1
Finish up Search Model of Unemployment
2
Growth: Facts from the Long-Run
Recap
Assumptions
1 period economy
Households have linear utility in consumption,
MACROECONOMICS
73-240
Lecture 9
Shu Lin Wee
This version: September 28, 2016
Plan for this Lecture
Externalities
Unemployment
U.S. Labor Markets
Adding Unemployment to Our Model
The Concept of a Steady State
Externalities
Externalities
Suppose households
MACROECONOMICS
73-240
Lecture 12
Shu Lin Wee
This version: October 17, 2016
Plan for this Lecture
1
Growth: Overview of the Theory
Growth: Overview of the Theory
Growth over time
Goal: can we account for how growth changed over time?
Growth over time
Shar
MACROECONOMICS
73-240
Lecture 10
Shu Lin Wee
This version: October 10, 2016
Plan for this Lecture
Unemployment Contd
adding the firm
The Concept of a Steady State
Unemployment (recap)
Recap
Looked at the decision of a job-seeker in 1 period model:
Value o
73-240, Fall 2014: Notes for recitation 2
TA: Ben Tengelsen
1
Consumer Maximization Problem
1.1
Prices and Marginal Utilities
We are interested in solving the following kinds of problems
max U (c, ) s.t. c = w(h ) + T.
(1)
c,
Dealing with constraints is h
73-240 Fall 2014
Handout
1
Households Problem
In class, we make a few assumptions about the household. Firstly, we assume that the
households objective is to maximize his utility. Secondly, we assume that the household
only consumes a consumption good and