Intermediate Microeconomics
Homework Set 1: Budget Set and Preferences
Due 09/10 (Beginning of class)
Exercise 1 You have an income of $50 to spend on two commodities. Commodity 1 costs $12 per unit and commodity 2 costs $5 per unit. (1) Write down
Intermediate Microeconomics
Homework Set 3: Optimal Choice
Due 09/24 (Beginning of class)
Exercise 1 Max has utility function u(x1 , x2 ) = x1 (x2 + 1). The price of x1 is $2 and the price of x2 is $1. Income is $10. How much x1 does Max demand? How
Chapter 21
N AME
Cost Curves
Introduction. Here you continue to work on cost functions. Total cost
can b e divided into xed cost, the part that doesnt change as output changes, and variable cost. To get the average (total) cost, average xed cost, and aver
Chapter 18
N AME
Technology
Introduction. In this chapter you work with production functions, relating output of a rm to the inputs it uses. This theory will look familiar to you, b ecause it closely parallels the theory of utility functions. In utility t
Chapter 19
N AME
Prot Maximization
Introduction. A rm in a comp etitive industry cannot charge more than
the market price for its output. If it also must comp ete for its inputs, then it has to pay the market price for inputs as well. Supp ose that a prot
Chapter 23
N AME
Industry Supply
Introduction. To nd the industry supply of output, just add up the
supply of output coming from each individual rm. Rememb er to add quantities, not prices. The industry supply curve will have a kink in it where the market
21
Asymmetric Information
So far, it is assumed that all the participants are given the same information.
symmetric information.
However, many informations are private.
Quality of goods, ability, preferences, etc.
21.1
Adverse Selection
Adverse selec
17
Imperfect Competition Monopoly
If there are large number of small rms, each of them cannot manipulate the
market price by himself alone. = Price-taking behavior
If there are small number of large rms, they realize that they can manipulate
prices dire
0
Introduction
To be talked.
1
Consumption set and budget constraint
1.1
Consumption set
Consumption set : set of consumptions without constraints
For simplicity, we consider that there are just two goods. This is enough for
understanding what trades an
Homework 7 (Total 20 points), Due on November 18, Thu.
Q1 (3pt.): Find all the pure-strategy Nash equilibria of the game below.
B
l
r
T
2, 1
4, 3
2, 4
M
3, 1 5, 1
B
A
m
0, 6
0, 2
3,5
1, 3
Q2: Consider the following game.
B
L
A
R
U
6, 5
1, 2
D
1, 2
3, 9
Fi
Midterm 2,
1
Spring 2008
Multiple Choice (52)
Q1: Choose the correct statement about perfect competition.
(a) It is a competition in which everybody has market power.
(b) It is a competition in which strategic interaction between participants is
unlimited
Economics 420K Professor Matt Clements Practice exam #2 (I)
University of Texas Fall 2006
1. (10 points) A firm wants to minimize the total cost of producing 100 tons of dynamite. The firm uses two factors of production, chemicals and labor. Assume
Homework 3, Fall 09 (Total 20 points)
Due on Sep. 24, Thu.
Q1: (33): (a) When the interest rate is 5%, what is the present value of an asset that gives you $100 this period and $200 next period?
(b) There are three periods, 1,2 and 3. The interest rate be
Homework 6 (Total 20 points), Due on November 17, Tue.
Q1 (2pt.): Find all the pure-strategy Nash equilibria of the game below.
B
l
U
A
m
r
1, 3 2, 1 3, 4
M
0, 5
4, 4
2, 3
D
2, 4
3, 3
0, 1
Q2: Find all Nash equilibria in the game below
B
Left Right
Up
0,
Midterm 1
October 2, Fall 2009.
Q1 (6): Depict the consumption set in the two good setting in which
(i) both goods are divisible;
(ii) only good 2 is divisible and good 1 is indivisible and allows integer consumptions
only.
Q2 (5): State the denition of t
Homework 6, Fall 10 (Total 20 points), Due on October 28, Thursday.
We go over partial equilibrium analysis with a linear inverse demand. The
inverse demand function is given by pD (q ) = 80 2q and the cost function
of the representative rm is given by C
Homework 5, Fall 10 (Total 20 points), Due on October 21, Thursday.
Q1 (2.5pt. each): Production function of the rm is given by
f (x) = 3x0.4 .
(i) Solve the prot maximization problem and obtain the factor demand
function and supply function, where the ou
Homework 2, Fall 10 (Total 20 points)
Due on Sep. 16, Thu.
Q1 (24): Preference is represented by u(x1 , x2 ) = x2 x5 . Denote the prices by (p1 , p2 )
12
and income by m.
(a) Calculate the marginal rate of substitution of good 2 for good 1 (as you did
bef
Economics 420K Professor Matt Clements Practice exam #2 (I): solutions
University of Texas Fall 2006
1. Bill and Ted are both correct. The statements are different ways of saying MRTS = price ratio (specifically, Bill's statement corresponds to MPL
MIDTERM 1 Economics 420K Microeconomic Theory Instructions: 1. Please write your name in the top right corner of every page of the exam, including this cover sheet. 2. The exam should have 6 pages, not including this cover sheet. If your exam is miss
Chapter 16
N AME
Equilibrium
Introduction. Supply and demand problems are bread and butter for
economists. In the problems b elow, you will typically want to solve for equilibrium prices and quantities by writing an equation that sets supply equal to dema
Chapter 20
N AME
Cost Minimization
Introduction. In the chapter on consumer choice, you studied a consumer who tries to maximize his utility sub ject to the constraint that he has a xed amount of money to sp end. In this chapter you study the b ehavior of
Final Exam
Fall 2009
Q1 (8pt.): Consider the following game,
B
Left
Up
3, 8
4, 3
Down
A
Right
2, 1
7, 2
Find all the pure and mixed strategy Nash equilibria.
Q2 (7pt.): Find the subgame-perfect Nash equilibrium strategies of the
extensive-form game below.
Homework 1, Fall 09 (Total 20 points)
Released Sep. 3, Due on Sep. 10, Thu.
1 (8pt.): There are two possible election outcomes, Obamas winning (state 1) and
McCain (state 2). There are two news sources, A and B. A says that the probability
of Obamas winni
Homework 2, Fall 09 (Total 20 points)
Due on Sep. 17, Thu.
Q1 (24): Kens preference is represented by u(x1 , x2 ) = x3 x2 . Denote the prices by
12
(p1 , p2 ) and income by m.
(a) Calculate the marginal rate of substitution of good 2 for good 1 (as you di
Homework 4, Fall 09 (Total 20 points), Due on October 15, Thursday.
Q1 (3pt. each): Production function of the rm is given by
f (x) = ln(x + 1).
(i) Solve the prot maximization problem and obtain the factor demand
function and supply function, where the o