Problem Set 3 Solutions
1. Prove that if expected utility function
([
])
represents preferences over lotteries , then expected utility function
([
])
also represents the same preferences if
for all , where
numbers.
Given
, where
([
])
and
are real
, we ha
Simon Fraser University
ECON 302
S. Lu
Practice Problems on Nash Equilibria
To be completed before the quiz
1. For each of the games in question 3 of problem set 3, find all Nash equilibria that are not in
pure strategies (you found the pure-strategy ones
Simon Fraser University
Spring 2016
Econ 302 Assignment 1
Due: in Lecture, Tuesday January 19, 2016.
Show all your work.
1. (3 points) Suppose that the demand function for a good is D(p) = 100/p2 for p 0;
D(p) is the units (the number) of people willing t
Simon Fraser University
Fall 2015
Econ 302 Assignment 2
Due: in Lecture, Tuesday September 29, 2015.
Show all your work.
1.
(4 points) For each of the following games, (i) nd strategies that survive iterative
deletion of strictly dominated strategies (ISD
ECON 302 Tutorial 2
Todays business
Solutions to Assignment 1
H. K. Chen (SFU)
ECON 302 Tutorial 2
January 23, 2013
1 / 12
Assignment 1 Q1.a
Given: D(p) = 100/p 2 for p 0 and C (q) = 2q.
a. Calculate the price elasticity of demand, (p):
p
D(p)
p
D(p)
p
20
Simon Fraser University
Fall 2012
Econ 302 Final Exam solution
Instructor: Songzi Du
Section D200
Thursday Dec. 6, 2012, 3:30 6:30 PM
This exam has two parts. Write your name, SFU ID number, and tutorial section number
on each part.
1. This is a closed-bo
Econ 302
Assignment 3 Solution
1.
(a) The monopolist solves:
max (Q) = Q(a bQ) cQ.
Q
The rst order condition is
a 2bQ c = 0,
or equivalently,
ac
,
2b
which is the monopolists optimal quantity; the associated price is
Q=
P (Q) = a b
ac
2b
=
a+c
.
2
(b) Fix
Simon Fraser University
Spring 2013
Econ 302 Final Exam
Instructor: Songzi Du
Section D200
Wednesday April 24, 2013, 8:30 11:30 AM
This exam has two parts. Write your name, SFU ID number, and tutorial section number
on each part.
Suggested Solution
Name:
Econ 302
Assignment 2 Solution
Problem 1
Part a) Note: I will explain everything only for question 1 part a. For the rest of
the answer key, I will give only short answers since they follow the same logic.
(i) ISD
Round 1 - B is strictly dominated by T
Gi
Simon Fraser University
Fall 2015
Econ 302 Assignment 1
Due: in Lecture, Tuesday September 22, 2015.
Show all your work.
1. (3 points) Suppose that the demand function for a good is D(p) = 100/p2 for p 0;
D(p) is the units (the number) of people willing t
Simon Fraser University
Spring 2013
Econ 302 Quiz Solution
Instructor: Songzi Du
Section D200
Thursday Feb. 7, 2013, 8:30 9:20 AM
Name:
SFU ID number:
Tutorial section number:
1. This is a closed-book exam.
2. You may use a non-graphing calculator.
3.
Econ 302
Assignment 5 Solution
1. Part i:
Part ii:
1
2
2. Part i:
There are three Nash equilibria in the stage game: (A, D), (B, C), and (1/2A+1/2B, 1/2C +
1/2D). I omit the detail of verifying these equilibria. Note that the Nash equilibrium
(1/2A + 1/2B
Simon Fraser University
Fall 2015
Econ 302 Assignment 7
Due: in Lecture, Tuesday November 24, 2015.
Show all your work.
1. (3 points) The principal is considering hiring a salesman to make to an important sale.
If the sale is successful, it will generate
Econ 302
Assignment 4 Solution
These three games are sequential games of perfect information. We solve them by backward
induction: start at the nodes/information sets one level above the terminal nodes, and solve
for the best responses; after solving thos
Econ 302
Assignment 7 Solution
1.
Part (i):
Suppose that the principal oers a at wage of w. The rst best problem is:
max 0.2 1000000 w subject to: (w)1/3 10 10
w
Clearly, the constraint binds at the optimum: w = (20)3 = $8000. By oering this wage the
prin
Simon Fraser University
Spring 2014
Econ 302 D200 Midterm Exam Solution
Instructor: Songzi Du
Monday March 10, 2014, 8:30 10:20 AM
The brief solutions suggested here may not have the complete explanations necessary for
full marks.
1. (10 points) Consider
Econ 302, Spring 2013
Assignment 1 Solution
Problem 1
a) Price elasticity of demand
( p ) =
2 p p
dD ( p ) p
= 100( 4 )
=2
dp D( p )
p 100
p2
b) Monopolist quantity and price.
From the demand function, derive the inverted demand function knowing that in
Simon Fraser University
ECON 302
Spring 2015
S. Lu
Problem Set 1
Due on January 19, at 10:30am
Remember to show your work on all questions.
1. The goal of this question is to review material from ECON 201/301, to derive the relation
between quasilinear ut
Simon Fraser University
ECON 302
Spring 2015
S. Lu
Problem Set 6
Due on March 2, at 10:30am
Remember to show your work on all questions.
Note: Your solutions to this problem set may not be returned to you before the midterm. I
therefore suggest that you k
Simon Fraser University
ECON 302
Spring 2015
S. Lu
Problem Set 3
Due on February 2, at 10:30am
Remember to show your work on all questions.
Note: Your solutions to this problem set may not be returned to you before the quiz. I therefore
suggest that you k
Simon Fraser University
ECON 302
Spring 2015
S. Lu
Problem Set 5
Due on February 23, at 10:30am
Remember to show your work on all questions.
Questions 1 and 2 refer to the following setup:
The demand curve in a market is Q = 6-P. Firm A and B are the only
Simon Fraser University
ECON 302
S. Lu
Practice Problem on Finitely Repeated Games
To be completed before the midterm
1. Consider a game G consisting of the following 3x3 simultaneous-move game played twice.
Left
Centre
Right
Top
2,2
1,0
-5,-10
Middle
0,1
Simon Fraser University
ECON 302
Spring 2015
S. Lu
Problem Set 7
Due on March 16, at 10:30am
1. Consider the following stage game, played twice, with discount factor 0 (for this
question, do NOT make the usual assumption that 1; that is, players might val
Simon Fraser University
ECON 302
Spring 2015
S. Lu
Problem Set 8
Due on March 23, at 10:30am
Remember to show your work on all questions.
1. Consider a profit-maximizing monopoly, and assume that there is no resale market, so that
the firm can charge each
Simon Fraser University
ECON 302
Spring 2015
S. Lu
Problem Set 9
Due on March 30, at 10:30am
Remember to show your work on all questions.
1. Consider a market for used cars with risk-neutral participants, like we did in lecture. Suppose
there are three qu
Suppose two firms want to merge. In general, the cost function of a merged firm is given by
( )
[
( )
( )]
(1)
where
and
are potentially different cost functions for the pre-merger firms. Intuitively
condition (1) makes sense, as the merged firm will try
Econ 302Fall 2009
Anke Kessler
Econ 302: Microeconomics II - Strategic Behavior
Midterm # 2 Oct29 2009,
14:30 15:30
1. (6 points) True/False/Uncertain? Explain your answer briefly (e.g., with a diagram
or an example)
a) A firm with a natural monopoly (i.e
Simon Fraser University
ECON 302
S. Lu
Practice Problems on Risk Preferences, Moral Hazard and Externalities
Not to be turned in
1. For each of the following utility functions over wealth w, compute the following:
i) the expected utility and the certainty
Simon Fraser University
ECON 302
Spring 2015
S. Lu
Problem Set 2
Due on January 26, at 10:30am
Remember to show your work on all questions.
1. Consider a market with demand curve Q = 32-3P. The market is a monopoly, and firms
marginal cost curve is MC = Q
Simon Fraser University
ECON 302
Spring 2015
S. Lu
Problem Set 4
Due on February 16, at 10:30am
1. For each of the games in question 3 of problem set 3, find all Nash equilibria that are not in
pure strategies (you found the pure-strategy ones on problem
Part 2: Market Failure I
Monopoly and Price Discrimination
Monopoly, Deadweight Loss, Two-Part Tariffs,
Direct Price Discrimination, Indirect Price Discrimination
1 / 22
Monopoly
Introduction
Sources of Monopoly
Basic Model (Uniform
Pricing)
The Inverse E
Part 2: Market Failure II
Externalities and Public Goods
External Effects, Coase Theorem, Transaction Cost,
Public Goods, Free Rider Problem
1 / 17
Externalities
Introduction
Externalities and
Markets
Market Failure:
Negative Externality
Market Failure: P
Part 1 Introduction
Demand Curve, Supply Curve, Competitive Equilibrium,
Pareto Efficiency, Market Failure
1/8
A Brief Review of
Competitive Markets
A Simple Model of
Exchange
Competitive Equilibrium
Efficiency and Market
Failure
This Course
A Brief Revie