Liberal Arts and Professional Studies
Department of Economics
Course: AP Econ 1530 3.0 A/B/F: Introductory Mathematics for Economists I
Course Webpage: http:/moodle.yorku.ca
Term: Fall 2013
Lecture Time:
Section A: Monday and Wednesday, 2:30PM 4:00PM
Sect
YORK UNIVERSITY
Faculty of Liberal Arts and Professional Studies
Economics 2300 B: Barry Smith
Final Exam: December 23, 2013
NAME:
STUDENT NUMBER
Instructions. The exam consists of 3 parts: A, B and C. Part A contains
choice and is worth 15 marks. Part B
Chapter 5
Choice
Economic Rationality
The principal behavioral postulate is
that a decisionmaker chooses its
most preferred alternative from those
available to it.
The available choices constitute the
choice set.
How is the most preferred bundle in
the
Chapter 19
Technology
Technologies
A technology is a process by which
inputs are converted to an output.
E.g. labor, a computer, a projector,
electricity, and software are being
combined to produce this lecture.
Technologies
Usually several technologies
Chapter 21
Cost
Minimization
Cost Minimization
A firm is a cost-minimizer if it
produces any given output level y
0 at smallest possible total cost.
c(y) denotes the firms smallest
possible total cost for producing y
units of output.
c(y) is the firms
Chapter 20
Profit
Maximization
Economic Profit
A firm uses inputs j = 1,m to make
products i = 1,n.
Output levels are y1,yn.
Input levels are x1,xm.
Product prices are p1,pn.
Input prices are w1,wm.
The Competitive Firm
The competitive firm takes all out
Chapter 16
Equilibrium
Market Equilibrium
A market is in equilibrium when total
quantity demanded by buyers equals
total quantity supplied by sellers.
Market Equilibrium
Market
p
demand
q=D(p)
D(p)
Market Equilibrium
p
Market
supply
q=S(p)
S(p)
Market Equ
Chapter 14
Consumers
Surplus
Monetary Measures of Gains-toTrade
You can buy as much gasoline as
you wish at $1 per gallon once you
enter the gasoline market.
Q: What is the most you would pay
to enter the market?
Monetary Measures of Gains-toTrade
A: You
Chapter 15
Market Demand
From Individual to Market
Demand Functions
Think of an economy containing n
consumers, denoted by i = 1, ,n.
Consumer is ordinary demand
function for commodity j is
x*i (p1 , p 2 , mi )
j
From Individual to Market
Demand Function
Chapter 6
Demand
Properties of Demand Functions
Comparative statics analysis of
ordinary demand functions - the
study of how ordinary demands
x1*(p1,p2,y) and x2*(p1,p2,y) change as
prices p1, p2 and income y change.
Own-Price Changes
How does x1*(p1,p2,y
Chapter 2
Budget
Constraint
Consumption Choice Sets
A consumption choice set is the
collection of all consumption
choices available to the consumer.
What constrains consumption
choice?
Budgetary, time and other
resource limitations.
Budget Constraints
A
Chapter 4
Utility
Preferences - A Reminder
p
x y: x is preferred strictly to y.
x y: x and y are equally preferred.
x f y: x is preferred at least as
~
much as is y.
Preferences - A Reminder
Completeness: For any two bundles
x and y it is always possibl
Chapter 3
Preferences
Rationality in Economics
Behavioral Postulate:
A decisionmaker always chooses its
most preferred alternative from its
set of available alternatives.
So to model choice we must model
decisionmakers preferences.
Preference Relations
C
Chapter 8
Slutsky
Equation
Effects of a Price Change
What happens when a commoditys
price decreases?
Substitution effect: the commodity
is relatively cheaper, so
consumers substitute it for now
relatively more expensive other
commodities.
Effects of a Pr