EC 201 F1, Fall 2016, Professor: Ishita Dey, Boston University
Name: _
Problem Set#1 based on Chapters 2, 3 and 4, 100 points
Due in-class on Wednesday, 09/21/2016
Instructions:
i)
You may discuss with others but write in your own words/steps.
ii)
Show al
EC201, Fall 2015, Prof. Jordi Jaumandreu
Practice Midterm 1
There are three exercises. The exercises have a dierent number of questions
each and the number of points that each question is worth is detailed (total
points are 100). Take these numbers as a g
EC201, Fall 2015, Prof. Jordi Jaumandreu
Solutions to Problem set #2
Demand and Supply, Applications
1. Replacing , and by its values demand turns out to be = 29020
The increse in induces an increment of 20 in the intercept and demand is
now = 310 20 To r
EC201 D Intermediate Microeconomic Analysis
Fall 2015
Prof. Jordi Jaumandreu
E-mail: [email protected]
Department of Economics, 270 Bay State Road
Room 416
Phone: 617 358 5925
Office hours: T 2:00 pm-3:30 pm; Th 3:30 pm-5:00 pm
Course overview:
Microeconomics
EC201, Fall 2015, Prof. Jordi Jaumandreu
Problem set #3
Consumer Theory: Preferences, Utility, Equilibrium
1. What happens to the budget line if the government applies a specific tax
of $1 per gallon on gasoline but doesnt tax other goods? What happens to
EC201, Fall 2015, Prof. Jordi Jaumandreu
Problem set #2
Demand and Supply, Applications
1. Suppose the demand for processed pork in Canada is = 180 20 +
20 + 3 + 2 where is the price of beef, the price of chicken and
stands for income. Assume that = 4 (d
EC201, Fall 2015, Prof. Jordi Jaumandreu
Solutions Problem set #1
Some mathematical concepts and definitions
1. Demand as a function of price, = (); supply as a function of price,
= (); utility as a function of two consumption goods, = (1 2 );
output as
EC201, Fall 2015, Prof. Jordi Jaumandreu
Problem set #4
Consumer Theory: Demand, price and Income changes
1. Derive and plot the demand curve for Coke of a consumer that views
Coke and Pepsi as perfect substitutes.
2. A consumer views coe and donuts as pe
Some mathematical concepts
and definitions
Outline
Functions
Properties of functions
Changes, rates of change, slopes
Derivatives
Optimization
Functions
A function is a rule that describes a relationship between
numbers, for example
y 2x
y x2
important:
EC201, Fall 2015, Prof. Jordi Jaumandreu
Solutions to Problem set #3
Consumer Theory: Preferences, Utility, Equilibrium.
1. Construct a plane gasoline-other goods with gasoline on the x-axis A
specific tax on gasoline has the same eect that an increase in
EC201, Fall 2015, Prof. Jordi Jaumandreu
Problem set #5
Production Function
1. Each extra worker produces an extra unit of output up to six workers.
After six, no additional output is produced. Draw the total product of labor,
average product of labor, an
Chapter Twenty-Five
Monopoly Behavior
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1
How Should a Monopoly Price?
So far a monopoly has been thought of as a firm
which has to sell its product at the same price to
every customer. This is uniform pri
Chapter Twenty-One
Cost Curves
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1
Types of Cost Curves
A total cost curve is the graph of a firms total cost function.
A variable cost curve is the graph of a firms variable cost
function.
Spring 2013 -
Chapter Eighteen
Technology
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1
Technologies
Firm behavior. When a firm makes choices it faces
many constraints, imposed by:
its customers,
its competitors,
nature.
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Chapter Four
Utility
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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 weakly to y.
~
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Chapter Six
Demand
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Demand Function
The consumers demand functions give the optimal
amounts of each of the goods as a function of the
prices and income faced by the consumer.
x1= x1(p1,p2,y)
x2 = x2(p
Chapter Twenty-Two
Firm Supply
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1
Firm Supply
How does a firm decide how much product to
supply? This depends upon the firms:
technology,
market environment,
goals,
competitors behaviors.
Spring 2013 - EC
Chapter Ten
Intertemporal Choice
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Intertemporal Choice
Persons often receive income in lumps; e.g.
monthly salary.
How is a lump of income spread over the following
month (saving now for consumption la
Chapter Three
Preferences
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Rationality in Economics
Behavioral Postulate: An economic decisionmaker
always chooses her most preferred alternative from
the set of available alternatives.
To model choice
Chapter Twelve
Uncertainty
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1
Uncertainty is Pervasive
What is uncertain in economic systems?
tomorrows prices,
future wealth,
future availability of commodities,
present and future actions of other peopl
Chapter One
The Market
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Introduction
Economics is a social science.
Focus of economic analysis is the study of individual
behavior.
The ultimate scope is to understand and then predict
individual choi
Chapter Eight
Slutsky Equation
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Effects of a Price Change
What happens when a commoditys price decreases?
Substitution effect: the commodity becomes relatively
cheaper, so consumers substitute it for n
Chapter Fourteen
Consumers Surplus
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1
Monetary Measures of Gains-to-Trade
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 t
Chapter Two
Budget Constraint
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Budget Constraints
A consumption bundle containing x1 units of
commodity 1, x2 units of commodity 2 and so on up
to xn units of commodity n is denoted by the vector
(x1, x
Chapter Nine
Buying and Selling
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Buying and Selling
Trade involves exchange - when something is bought
something else must be sold.
What will be bought? What will be sold?
Who will be a buyer? Who wil
Chapter Fifteen
Market Demand
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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:
i
j
Chapter Twenty-Four
Monopoly
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Pure Monopoly
A monopolized market has a single seller.
The monopolists demand curve is the (downward
sloping) market demand curve.
So the monopolist can alter the market
Chapter Twenty
Cost Minimization
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1
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
Chapter Five
Choice
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1
Utility - A Reminder
The marginal utility of commodity i is:
U
MU i
xi
It is also represented as:
U MU i xi
Totally differentiating this identity gives:
MU1 x1 MU 2 x2 U 0
Sprin
Chapter Nineteen
Profit-Maximization
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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,w