Urban Economics Problem Set # 1
Jonathan Timianko Due February 9th, 2010 Urban Economics Karl Storchmann TR 2:00-3:15
1. The advent of the tunnel that is bored through the mountain that was separating the two regions was a principle factor in allowing tra
Chapter 13
General Equilibrium and Welfare
Perfectly Competitive Price System
We assume all markets are perfectly competitive a large number of homogeneous goods
both consumption goods and factors of production
each good has an equilibrium price there
Chapter 3
Review of Statistics Review the Concepts
Solutions to Exercises
1. The central limit theorem suggests that when the sample size ( n ) is large, the distribution of the
2 2 sample average ( Y ) is approximately N Y , Y with Y = 2 Y = 43.0, we hav
Chapter 12
The Partial Equilibrium Competitive Model
Market Demand
Assume that there are only two goods (x and y)
An individuals demand for x is
Market demand for X = x i ( px , py , I i )
i =1
n
Market Demand
X
px
Individual 1s demand curve
px
Individu
Chapter 8
Nonlinear Regression Functions
Solutions to Empirical Exercises
1.
This table contains the results from seven regressions that are referenced in these answers.
Data from 2004
(1)
(2)
(3)
AHE
ln(AHE)
ln(AHE)
0.439*
(0.030)
0.024*
(0.002)
(4)
(5)
CHAPTER 14
TRADITIONAL MODELS OF IMPERFECT COMPETITION
The problems in this chapter are of two types: analytical and essay. The analytical problems look at a few special cases of imperfectly competitive markets for which tractable results can be derived.
CHAPTER 13
MONOPOLY
The problems in this chapter deal primarily with marginal revenue-marginal cost calculations in different contexts. For such problems, students primary difficulty is to remember that the marginal revenue concept requires differentiatio
CHAPTER 12
GENERAL EQUILIBRIUM AND WELFARE
The problems in this chapter focus primarily on the simple two-good general equilibrium model in which supply is represented by the production possibility frontier and demand by a set of indifference curves. Beca
Chapter 11
Profit Maximization
The Nature of Firms
A firm is an association of individuals who have organized themselves for the purpose of turning inputs into outputs Different individuals will provide different types of inputs the nature of the contrac
Measuring the Economy
A Primer on GDP and the National Income and Product Accounts
U.S. DEPARTMENT OF COMMERCE
Carlos M. Gutierrez
Secretary
ECONOMICS AND STATISTICS ADMINISTRATION
Under Secretary for Economic Affairs
Cynthia A. Glassman
BUREAU OF ECONOMI
CHAPTER 11
APPLYING THE COMPETITIVE MODEL
The problems in this chapter are intended to illustrate the types of calculations made using simple competitive models for applied welfare analysis. Usually the problems start from a supply-demand framework much l
Chapter 10
Cost Functions
Definitions of Costs
Accounting and economic costs are different Accountants stress out-of-pocket expenses, depreciation, and other bookkeeping entries economists focus more on opportunity cost Labor Costs to accountants, labor
Chapter 14
Monopoly
Monopoly
A monopoly is a single supplier to a market This firm may choose to produce at any point on the market demand curve A monopoly exists because other firms find it unprofitable or impossible to enter the market Barriers to entr
CHAPTER 15
GAME THEORY MODELS OF PRICING
The first six problems for this chapter are intended to illustrate the concept of Nash equilibrium in a variety of contexts. Many of them have only modest economic content, but are traditional game theory problems.
Chapter 15
Imperfect Competition
Short-Run Decisions: Pricing & Output
When there are only a few firms in a market, predicting output and price can be difficult
how aggressively do firms compete? how much information do firms have about rivals? how ofte
CHAPTER 16
LABOR MARKETS
Because the subject of labor demand was treated extensively in Chapter 9, the problems in this chapter focus primarily on labor supply and on equilibrium in the labor market. Most of the labor supply problems (16.116.6) start with
CHAPTER 18
UNCERTAINTY AND RISK AVERSION
Most of the problems in this chapter focus on illustrating the concept of risk aversion. That is, they assume that individuals have concave utility of wealth functions and therefore dislike variance in their wealth
CHAPTER 19
THE ECONOMICS OF INFORMATION
The problems in this chapter stress the economic value of information and illustrate some of the consequences of imperfect information. Only a few of the problems involve complex calculations or utilize calculus max
CHAPTER 20
EXTERNALITIES AND PUBLIC GOODS
The problems in this chapter illustrate how externalities in consumption or production can affect the optimal allocation of resources and, in some cases, describe the remedial action that may be appropriate. Many
CHAPTER 17
CAPITAL MARKETS
The problems in this chapter are of two general types: (1) those that focus on intertemporal utility maximization and (2) those that ask students to make present discounted value calculations. Before undertaking the PDV problems
Stats test notes: Interquartile Range= third quartile minus first quartile Sample variance-sum of squared standard deviations divided by n-1=(standard deviation) squared Coefficient of variation: ratio of standard deviation to the mean Population variance
CHAPTER 10
THE PARTIAL EQUILIBRIUM COMPETITIVE MODEL
The problems in this chapter focus on competitive supply behavior in both the short and long runs. For short-run analysis, students are usually asked to construct the industry supply curve (by summing f
Chapter 9
Production Functions
Production Function
The firms production function for a particular good (q) shows the maximum amount of the good that can be produced using alternative combinations of capital (k) and labor (l)
q = f(k,l)
Marginal Physical
PART ONE Solutions to Chapter Exercises
Chapter 2
Review of Probability
Solutions to Exercises
1. (a) Probability distribution function for Y Outcome (number of heads) probability Y=0 0.25 Y=1 0.50 Y=2 0.25
(b) Cumulative probability distribution function
Chapter 13
Experiments and Quasi-Experiments
Solutions to Exercises
1. For students in kindergarten, the estimated small class treatment effect relative to being in a regular class is an increase of 13.90 points on the test with a standard error 2.45. The
Chapter 10
Regression with Panel Data
Solutions to Exercises
1. (a) With a $1 increase in the beer tax, the expected number of lives that would be saved is 0.45 per 10,000 people. Since New Jersey has a population of 8.1 million, the expected number of li
Chapter 4
Linear Regression with One Regressor
Solutions to Empirical Exercises
1. (a) AHE = 3.32 + 0.45 Age Earnings increase, on average, by 0.45 dollars per hour when workers age by 1 year. (b) Bobs predicted earnings = 3.32 + 0.45 26 = $11.70 Alexiss
Chapter 13
Experiments and Quasi-Experiments
Solutions to Empirical Exercises
1. The following table provides answers to (a)(c) Dependent Variable = Call_Back Regressor Black Female Black High High Black Intercept 0.097* (0.006) 0.097* (0.006) 0.073* (0.0