148
ASSET MARKETS
(Ch. 11)
$15 in the rst year, because it will sell for $25 one year later. This is a
66.66% rate of return, which is better than the rate of interest. When the
interest rate is 5%, investors are willing to pay at least $25/1.05 = $23.81
Ec1010a: Microeconomic Theory
Fall 2014
Problem Set #1 Solutions
1.
ANS:
C
Calculate how much money was spent on oysters to find the price per unit and then plug
the prices into the budget constraint.
2.
ANS:
B
Graph the two inequalities as two lines, whe
Economics 1010a: Microeconomic Theory
Fall 2014
Problem Set #5 Solutions
1. ANS: B
If the price of mead is $60, Sir Plus consumes (60) = 100 60 = 40 units of
mead. The price at which Sir Plus wants to consume exactly 0 units of mead
which is the intercep
Economics 1010a: Microeconomic Theory
Fall 2014
Problem Set #4
To be completed by 9/29/2014 (not for submission or grade)
Part I: Workouts Book
12.2, 12.3, 12.9, 13.2
Part II: Multiple Choice
Identify the choice that best completes the statement or answer
c
Lecture 2: Budget Constraints 2012 Jerey Miron
Outline
1. Introduction
2. Two Goods are Often Enough
3. Properties of the Budget Set
4. How the Budget Line Changes
5. The Numeraire
6. Taxes, Subsidies, Rationing
1
Introduction
Our development of economi
c
Lecture 7: Income and Substitution Eects 2012 Jerey Miron
Outline
1. Introduction
2. The Substitution Eect
3. The Income Eect
4. The Sign of the Substitution Eect
5. The Total Change in Demand
6. Examples
7. Another Substitution Eect
8. Compensated Dema
c
Lecture 8: Endowments and Labor Supply 2012 Jerey Miron
Outline
1. Introduction
2. The Budget Constraint
3. Comparative Statics
4. Labor Supply
1
Introduction
So far, we have modeled the consumer as receiving income exogenously. In practice,
people earn
c
Lecture 9: Intertemporal Choice 2012 Jerey Miron
Outline
1. Introduction
2. Intertemporal Consumption Choice
2. Comparative Statics: Borrowers versus Lenders
3. The Interest Rate and Savings
4. Real versus Nominal Interest Rates
1
Introduction
We next w
c
Chapter 3: Preferences 2012 Jerey Miron
Outline
1. Introduction
2. Consumer Preferences
3. Assumptions About Preferences
4. Indierence Curves
5. Examples of Preferences
6. WellBehaved Preferences
1
Introduction
Our goal in the rst part of the course is
Chapter 5: Choice
c
2012 Jerey Miron
Outline
1. Introduction
2. Optimal Choice: Graphical Analysis
3. Optimal Choice: Math
4. Relation Between Graphs and Math: The MRS and MU
5. Caveats: Some Special Cases
6. Summary
1
Introduction
We are in the process
Economics 1010a: Microeconomic Theory
Problem Set #1 Fall 2014
Material for 9-8-2014 (not for submission or grade)
Part I: Workouts Book
1.1; 1.3; 2.1; 2.3; 3.1; 3.4; 4.0; 4.2; 4.3
Part II: Multiple Choice
Identify the choice that best completes the state
Economics 1010a: Microeconomic Theory
Fall 2014
Problem Set #2
To be completed by 9/15/2014 (not for submission or grade)
Part I: Workouts Book
5.1; 5.3; 6.1; 6.3; 8.1; 8.2; 9.2; 9.7; 10.1; 10.3
Part II: Multiple Choice
Identify the choice that best compl
Economics 1010a: Microeconomic Theory
Fall 2014
Problem Set #2
To be completed by 9/15/2014 (not for submission or grade)
Part I: Workouts Book
5.1; 5.3; 6.1; 6.3; 8.1; 8.2; 9.2; 9.7; 10.1; 10.3
Part II: Multiple Choice
Identify the choice that best compl
Economics 1010a: Microeconomic Theory
Fall 2014
Problem Set #3
To be completed by 9/22/2014 (not for submission or grade)
Part I: Workouts Book
11.0; 11.1; 11.2; 11.6
PartII: Multiple Choice
Identify the choice that best completes the statement or answers
The real interest rate is equal to the:
Practice Questions on Chapter 4: Money and Inflation
Assume that the questions are all about the long run.
Name: _ Date: _
A)
B)
C)
D)
A)
B)
C)
D)
A)
B)
C)
D)
A)
1. Economists use the term money
to refer to:
income.