Changing the inputs
So far in the course, weve built a model of consumer choice:
A decision maker will choose so as to best achieve her objectives, given
the constraints that she faces
Econ 1110: Intermediate Microeconomics
Demand
Now we will do comparati
The consumer choice model
Remember that our goal right now is to model this:
Econ 1110: Intermediate Microeconomics
Constraints and Choice
A decision maker will choose so as to best achieve her objectives, given
the constraints that she faces
We had a to-
Economics 1110:
Intermediate Microeconomics
Spring 2013
Problem Set 1
Due in class on Wednesday, February 6
Instructor: Amy Serrano
1. Sketch a couple of the indifference curves associated with each of the following kinds
of preferences, and indicate the
Econ 1110 S01, Spring 2015
Jim Campbell, Brown University
Problem Set 4: General equilibrium in an exchange economy
Due Wednesday, March 11th, in class or by 5pm to the box in the basement of Robinson Hall.
1
Solving for competitive equilibrium (25 points
ECON1110: Intermediate Microeconomics Spring 2013
Professor: Geoffroy de Clippel
Problem Set 1 Solution
1. (25 points) Find the first derivative of the following functions.
a. abx b1
a
b. ax b
1
1
(ax bx 2 ) 2 (a 2bx )
c. 2
2
x
d. 2 xe
ECON 1110: Intermediate Microeconomics
Spring 2013
Professor: Georoy de Clippel
Problem Set 4 - Solutions
1. (50 points) Suppose that Anne eats only apples (good 1) and oranges (good 2). Her
preferences are represented by the following utility function: u
Econ 1110 S01, Spring 2015
1
Answers to Problem Set 2: Constraints and Choice
Drawing budget sets (20 points)
1a): x1 + 3x2 30
2
1b): 4x1 + 2x2 20
Optimal choice by tangency (20 points)
p1
x
a) M RS = p2 gives 2x21 = 1 and so x2 = 2x1 . Substituting this
ECON 1110: Intermediate Microeconomics
Spring 2012
2013
Professor: Georoy de Clippel
Answerkey for Problem Set 9
8
1. Consider a market with the following demand and supply functions:
D(p) = maxcfw_0, 10 2p and S (p) = 3p.
(a) Represent the supply and dem
Econ 1110 S01, Spring 2015
Jim Campbell, Brown University
An example of nding price elasticity of demand
Question
A consumer has demand for a good according to the demand curve x = 102p. Find an expression
for price elasticity of demand. What is the elast
Econ 1110 S01, Spring 2015
Edgeworth box practice for Midterm 1
These are a couple of practice problems for sketching Edgeworth boxes. Your midterm on March
4th will include a question similar in style to these, as well as questions related to the materia
Econ 1110, May 15, 2015
Answers to Final Exam
1. (a) For py = 1, MRS equal to the price ratio yields x = 16/p2x . Substituting in the budget equation yields y = m 16/px . (Note that this is
non-negative under the assumption that y 16/px ).
(b) v(px , m) =
58
Solutions to Exercises
Chapter 18 Solutions
1.(a) Correction. The textbook should read: What condition or conditions must hold for the
TV to be considered a public good? The answer is: Nonexclusivity in use. Once the
television is bought, neither Fabio
Econ 1110 Spring 2015, S02
First Exam
February 19 Outline of Answers
1. (i) The demand is l = r = 15.
(ii) He still consumes equal amounts of l and r, which means that
l = r = 10.
(iii) The tax revenue is $10.
(iv) After tax income is $20 and the new dema
ECON 1110: Intermediate Microeconomics
Spring 2013
Professor: Georoy de Clippel
Midterm 2 - Solutions
1
Denitions
1. An inferior good means its demand decreases as income increases.
2. The substitution eect is part of the change in optimal bundle that is
ECON 1110: Intermediate Microeconomics
Spring 2013
Professor: Georoy de Clippel
Problem Set 8 - Solutions
1. (40 points) Consider the Crusoe economy with a production function f (L) = L and
a utility function u(C, L) = C 2 (L L), where C represents the nu
ECON 1110: Intermediate Microeconomics
Spring 2013
Spring 2012
Professor: Georoy de Clippel
Problem Set 7 6
Problem SetSolution
Due Wednesday March 21 in class or by 4 pm in the homework box in the basement of
Robinson Hall. (100 points total)
1. (50 poin
ECON 1110: Intermediate Microeconomics
Spring 2013
Professor: Georoy de Clippel
Problem Set 6 - Solutions
1. (10 points) Consider a consumer whose preferences are represented by the utility function u(x, y ) = mincfw_2x1 , x2 (perfect complemets). Observ
ECON 1110: Intermediate Microeconomics
Spring 2013
Professor: Georoy de Clippel
Problem Set 5 - Solutions
1. (40 points) Allison has utility function u(x1 , x2 ) = x1 x2 . She earns income of $100.
The price of good 1 is p1 = $1 and the price of good 2 is
ECON 1110: Intermediate Microeconomics
Spring 2013
Professor: Georoy de Clippel
Problem Set 3 - Solutions
1. (60 points) For each of the following utility functions, graph the indierence curves associated with the bundles (1, 2) and (3, 2). Find one other
Econ 1110, Spring 2015
Answers to Problem Set 1: Preferences and Utility
1
Drawing indierence curves (25 points)
2
Marginal utility and marginal rate of substitution (25 points)
a) M U1 =
u
x1
= 8x1 x2
b) M U1 =
u
x2
= 4x2
1
c) M RS =
M U1
M U2
=
8x1 x2
4
Econ 1110: Intermediate Microeconomics
Math refresher answers
Jim Campbell
January 21, 2015
1
Find the derivative of the following functions (where a, b and c are constants):
a) f (x) = b
b) f (x) = cbxc1
c) f (x) =
1
x
d) f (x) = 3x2 16x + 30
e) f (x) =
Econ 1110 S01, Spring 2015
An example of nding a competitive equilibrium
Question
Consider an exchange economy with two goods, x1 and x2 . Consumer A has preferences represented
by the Cobb-Douglas utility function
1
1
UA = (x1 ) 2 (x2 ) 2
A
A
(1)
and an
Econ 1110 S01, Spring 2015
1
Answers to Problem Set 3
Comparative statics (20 points)
Demand functions: x =
1
p2
p1
and x =
2
mp2
.
p2
Good 1 is neither normal nor inferior, since demand does not change with income. Good 2 is
normal, since demand increase
EC 1110 S02
Spring 2015
Second Exam
Outline of Answers (without the diagrams)
1. (i) The isoquant for y = 1 has the equation x1 + 2x2 = 1, or x2 =
0.5 0.5x1 , a straight line with slope -0.5 passing through (0, 0.5) and
(1, 0).
[5 points]
(ii) The iso-cos