EC 323 PRACTICE QUESTIONS FOR MIDTERM 1
1 Suppose A = cfw_a, b, c and we have only the following information about an
agents preferences: her preferences are transitive, she strictly prefers a to b and
she is indierent between a and c. Can we conclude fro
Lecture Notes on
Economic Theory and Psychology
Jawwad Noor
Dept of Economics,
Boston University,
Boston MA
jnoor@bu.edu
May 17, 2014
Contents
1 Abstract Choice: Theory
1.1 An Abstract Model of Choice
1.1.1 Primitives . . . . . . .
1.1.2 Assumptions . . .
EC 323: Problem Set 4 Solutions
Nick Saponara, Boston University
1. The reduced form is (.25, 100; .75, 0).
2. Notice that u is convex, while w is concave. So for any lottery, expected utility computed with u will
prefer the lottery to the expected value,
EC 323: Problem Set 2
Nick Saponara, Boston University
Due February 11, 2016
1. For each of the preferences in Question 3 (a) and (b) of Problem Set 1, determine C (cfw_a, b) , C (cfw_a, c),
C (cfw_b, c), and C (cfw_a, b, c) under the motivation hypothesi
EC 323: Problem Set 1 Solutions
Nick Saponara, Boston University
1. The preference is not complete, as we do not have a preference between a and c. It is also not
transitive. To see why, notice that the hypothesis of transitivity is satisfied, as we have
EC 323: Problem Set 3 Solutions
Nick Saponara, Boston University
1. Since cfw_a = C (cfw_a, b, c), it follows that u (a) > u (b) and u (a) > u (c) since otherwise the model
predicts b or c would also be chosen. Since b C (cfw_a, b), then we must have u (b
EC 323: Problem Set 3
Nick Saponara, Boston University
Due March 15, 2016
1. Suppose that an agent who respects the Satisficing model is observed to choose C (cfw_a, b) = cfw_a, b
and C (cfw_a, b, c) = cfw_a. Deduce as much as you can about her preference
EC 323: Problem Set 2 Solutions
Nick Saponara, Boston University
1. Since both preferences are complete, you can invoke a proposition from class to determine that the
choices must be the same as in PS1 for every menu (you could also do it by applying the
EC 323: Problem Set 5
Nick Saponara, Boston University
Due April 14, 2016
1. Suppose that T = 2 and C is the set of nonnegative real numbers. The agents preference over
streams satisfies the static DU model with discount factor (0, 1) and u (c) = c. Deter
EC 323: Problem Set 1
Nick Saponara, Boston University
Due February 2, 2016
1. Consider the preference over A = cfw_a, b, c defined by
a b,
b c.
Is this preference complete? Is it transitive?
2. Let A = cfw_a, b, c and suppose that all you know about an a
Behavioral Economics: Past, Present, Future
Colin F. Camerer
Division of Humanities and Social Sciences 228-77
Caltech
Pasadena, CA 91125
camerer@hss.caltech.edu
George Loewenstein
Department of Social and Decision Sciences
Carnegie-Mellon University
Pitt
EC 323: Behavioral Economics
Syllabus
January 17, 2014
Instructor:
Office:
E-mail:
Phone:
Office Hrs:
Jawwad Noor
Room 553, Dept of Economics, 270 Bay State Road
jnoor@bu.edu
617-353-4436
By appointment
Course Overview: As the science of how resources are
EC 323: Problem Set 4
Nick Saponara, Boston University
Due March 24, 2016
1. Consider the two stage lottery that yields both p = (.5, 100; .5, 0) and q = (1, 0) with probability 1/2
each. What is its reduced form?
2. For any x 0, let
u (x ) = x 2
w (x ) =