EC204 Homework assignment #1 Student: _
Due Tuesday, February 2, 2016, in class!
Part I.
1. Suppose that we are contemplating to run a simple experiment. We will throw the
two fair dice generating 36 possible
EC101 Cumulative Final Study Guide
Lecture 1: Introduction / Lecture 2: What is Economics?
Anyone can legally call themselves an economist
Basic principles of economic thinking:
o Think about goods (not money)
o Everything has a cost
Opportunity cost-
September 8, 2015
09/08/2015
Principles of Economic Thinking
Two useful principles covered so far in Intro
3. When deciding how many think at the margin
o The marginal unit is a unit you might add to units that you
already have
ex. If I already have fo
September 29
09/29/2015
Other Types of Elasticity
Price Elasticity and the Slope of the Demand Curve
Elastic demand- quantity demanded changes a lot in response to a
price change
o Steeper the line- lower the elasticity
Inelastic demand- quantity demand
October 15, 2015
10/15/2015
Acceptability of market outcomes
Free markets are very good at creating surplus even when they
deviate from the perfectly competitive model
But sometimes free markets fail or they may produce unacceptable
units
Free-market e
October 6, 2015
10/06/2015
Consumer choice
How do consumers decide what to purchase?
o Primarily a question of psychology
o Economists traditionally have used models of rational, selfinterested consumers
Traditional models do not include the psychologic
September 22, 2015
09/22/2015
Market Equilibrium, Demand, and Supply Shifts
A firm wants to produce and sell more goods at higher prices, because
higher prices justify the use of more expensive inputs.
Market Equilibrium
A system is in equilibrium when t
September 17
09/17/2015
Consumer surplus, production, and supply
Low prices justify putting product to less important uses
Willingness to pay (WTP)
Willingness to pay is the maximum that a consumer is willing to pay
for a good or service
WTP - price = c
September 24
09/24/2015
Elasticity of Demand
So far,
On the demand curve, when the price rises, the quantity demanded
falls
On the supply curve, when the price rises, the quantity supplied
increases
Who cares?
o Firms
o Governments
To answer questions
EC101 Exam II Study Guide (lectures 9-16)
LECTURE 9: Consumer Choice and Consumer Welfare
Behavioral economics- incorporates economics and psychology
People consume to get satisfaction or utility
People want to consume a combination of goods and services
September 10, 2015
09/10/2015
Free Markets, Voluntary Exchange, and Money
In some places, the entire economy works like the army: orders are
passed down from the top
In other places, the economy is completely decentralized: families run
their own business
October 8, 2015
10/08/2015
Competition, Producer Surplus and Economic Efficiency
Price setters and price takers
A seller is called a price taker if she accepts a price set by others
(usually the market price)
A seller is called a price setter if she set
a) What is the socially optimal quantity of resource extraction in the two periods? This part dthe
question can be satisfactorily answered with a carefully drawn graph. But, in addition. if
you're comfortable using some simple algebra, you can get more pr
Politics and the English Language
George Orwell 1946
Most people who bother with the matter at all would admit that the English
language is in a bad way, but it is generally assumed that we cannot by conscious
action do anything about it. Our civilization
1
MULTIVARIATE
PROBABILITY
DISTRIBUTIONS
Statistics for Economists EC 507 A1
2
Introduction
For a given experiment, we are often interested in relationships of two or more random
variables.
For a study of lung cancer, a researcher is interested in the n
1
MULTIVARIATE PROBABILITY
DISTRIBUTIONS PART II
Statistics for Economists EC 507 A1
2
Expected Value of a Bivariate Random Variable
Discrete Case
Definition:
Let
and
function
Let
,
,
be two discrete random variables with the joint probability
, .
be a
1
COUNTING
TECHNIQUES IN
PROBABILITY
Statistics for Economists EC 507 A1
2
Calculating Probability of an Event
Axiomatic definition of probability states only the conditions an assignment of
probabilities must satisfy, but it does not tell us how to assi
1
SPECIAL CONTINUOUS
DISTRIBUTIONS
Statistics for Economists EC 507 A1
2
Special Continuous Distributions
Uniform distribution on an interval
Normal distribution
Exponential distribution
Gamma distribution
Chi-square distribution
3
Uniform Distributi
1
INTRODUCTION TO
PROBABILITY
Statistics for Economists EC 507 A1
2
Introduction
After the data is described and summarized, we hope to be able to
draw a conclusion on a question of interest.
The part of statistics concerned with the drawing of conclusi
EC 403 Game Theory, Boston University
Summer term 2, 2013
Final
Total: 100 points
Question 1. (25 points)
Consider the following model of price competition. Two firms, A and B, set prices (pA and pB ) in
a market whose demand curve is given by the equatio
EC 403 Game Theory, Boston University
Summer 2, 2013
Problem Set 3 - Answer Key
Question 1
a) The backward induction solution is (B, G, J, L, N ), (C, E).
b) The backward induction solution is (A, H, J, K, N ), (C, F ).
c) The backward induction solution
EC 403 Game Theory, Boston University
Summer 2, 2013
Midterm 2
Total: 100 points. Time: 90 minutes.
Question 1 (35 points)
1.a) (10 points) How many subgames are there in game I? And in game II?
1.b) (25 points) Find all the Pure-Strategy Subgame Perfect
EC 403 Game Theory, Boston University
Summer 2, 2013
Problem Set 2 - Answer Key
Question 1
The game has the following Nash Equilibria:
(N orth, (East, W est), (N orth, (East, South), (N orth, (W est, South),
(East, (N orth, W est), (East, (N orth, South),
EC 403 Game Theory, Boston University
Summer 2, 2013
Problem Set 4
Question 1
Consider the following stage games:
a)
1/2
L
C
R
U
0, 0
0, 0
1, 1
M
0, 0
2, 2 0, 2.5
D
0, 0, 0, 0
0, 0
b)
L
C
R
U
0, 0
0, 0
1, 1
M
1, 0
2, 2 0, 2.5
D
0, 0, 0, 0
1/2
0, 0
Define
EC 403 Game Theory, Boston University
Summer 2, 2013
Midterm 2 - Answer Key
Question 1
1.a) Game I has 3 subgames, game II has 2 subgames.
1.b) The unique SPNE in game I is (A, F ), (D). The game is a game of perfect information,
therefore the SPNE corres
EC 403 Game Theory, Boston University
Summer 2, 2013
Problem Set 3
Question 1
Solve these games using backward induction.
a)
1
b)
1
G
3,8
C
7,9
H
2
A
D
I
1
1,2
J
1
1
B
E
2,1
10,4
K
0,5
L
2
F
1
M
4,0
N
6,5
c)
2
3
Question 2.
Consider the following game.
Th
EC 403 Game Theory, Boston University
Summer 2, 2013
Problem Set 4 - Answer Key
Question 1
Stage game a has 2 pure-strategy Nash Equilibria: (U, R) and (D, L). You should therefore check
whether vectors of actions which are not NE of the stage game can be
EC 403 Game Theory, Boston University
Summer 2, 2013
Problem Set 5 - Answer Key
Question 1.
Consider a principal-agent game identical to the one described in class, except for the probability
of a good outcome following the choice of high effort, which is
EC 403 Game Theory, Boston University
Summer 2, 2013
Problem Set 5
Question 11
Repeat the analysis of the principal-agent model presented in class, but consider a more general
case: p, that is, the probability of success following high effort, can take an
EC 403 Game Theory, Boston University
Summer 2, 2013
Final exam - Answer Key
Question 1
1.a) The profits of firm A are:
(3 pA )pA if pA < pB ,
(3pA )pA
2
if pA = pB ,
0 if pA > pB .
Profits for firm B can be computed in the same way. The matrix of payoffs