Zenginobuz/EC 501
Fall 2012
Problem Set 1
(due Thursday, Oct 11, 2012)
1. Prove the following statements about preference relations:
(a) If
is transitive, then
is also transitive.
(b) If
is transitive, then
is also transitive.
(c) If
is complete and trans
EC 501/Zenginobuz
Fall 2012
Problem Set #10
(Due December 20, 2012)
1. Jehle & Reny: Exercise 5.10
2. Jehle & Reny: Exercise 5.11
3. Jehle & Reny: Exercise 5.12
4. Jehle & Reny: Exercise 5.13
5. Assume that there are two consumers with the consumption set
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Economics 501B: 2015 Exercise Set #5
1. There are two goods; denote their quantities by x and y. Amys endowment bundle (
x,
y ) has
a strictly positive amount of at least one of the goods, and she has a lexicographic preference:
(x0 , y 0 ) % (x, y) x0 =
15.3.7 Show that if both consumers in an Edgeworth box economy have continuous, strongly
monotone. and strictly convex preferences, then the Pareto set has no holes": precisely, it is
a connected set. Show that if, in addition, the preferences of both con
Economics 201b
Spring 2010
Problem Set 4
Due Thursday April 15
1. Robinson-Crusoe in U.S.S.R. Consider a Robinson-Crusoe economy with
two-goods, one consumer and one firm. Firm is labor-oriented: it maximizes
the profits per unit of labor, given the wage
Economics 201b
Spring 2010
Problem Set 6
Due Thursday April 29
1. There are many foreign embassies in the Washington, DC. In fact, there is an
area of the city where quite a few of them are very close to each other. As you
walk along one of the streets yo
EC501 Part 2 PS 1
1) There are two goods (x1 and x2 ) and two people (Al and Bill) in the economy. Al owns eight units of the x1
and none of the x2 . Bill owns none of the x1 , and three units of the x2 . Their preferences are described by the
utility fun
Economics 201b
Spring 2010
Problem Set 2
Due Thursday April 1
1. Competitive Equilibrium(-a) When Preferences Are Kinked. Recently
there have been a surge in decision theory models that are non-differentiable
in nature. For example, popular models incorpo
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EC 501/Zenginobuz
Fall 2012
Problem Set #3
Due October 18, 2012
1. Define the Marshallian demand function and show that it is homogeneous of degree 0.
2.
a. Define the expenditure function.
b. Hold u constant. Prove (formally) that the expenditure functio
EC 501/Zenginobuz
Fall 2012
Problem Set #4
Due October 30, 2012
1) A consumer with income w0 faces prices p0 and enjoys utility u0 = v(p0, w0). When prices
change to p1, the cost of living is affected. To measure the impact of these price changes,
we may
EC 501/Zenginobuz
Fall 2012
Problem Set #6
Due November 15, 2012
(Solutions to be turned in on Nov 20, 2012)
1) Jehle and Reny, Exercise 2.14.
2) Jehle & Reny: Exercise 2.15
3) Jehle & Reny: Exercise 2.23
4) Jehle & Reny, Exercise 2.25
5) Barbaros Hayrett
EC 501/Zenginobuz
Fall 2012
Study Questions on Production Theory
1. TRUE OR FALSE. Explain
a) A production isoquant is a locus of combinations of inputs that are equally profitable.
b) If the production function is f(x,y) = mincfw_2x + y, x + 2y, then whe
EC 501/Zenginobuz
Fall 2012
Problem Set #7
Due December 4, 2012
1. Jehle & Reny: Exercise 2.25
2. Jehle & Reny: Exercise 2.28
3. Suppose an agent has von Neumann - Morgenstern preferences over money lotteries that
can be represented by the utility functio
EC 501/Zenginobuz
Fall 2012
Problem Set #11
(Not to be turned in)
1. In an economy with two people and two goods, suppose
u1(x1) = 3x11+2x12
u2(x2) = x21 x22
w1=(l0,9)
w2=(0,l)
a) Draw an Edgeworth box diagram to represent the economy.
b) Solve for the Pa