Econ 380
Math Econ
Skillman
Fall 2013
Study Buddy Volume II
1. Review the statements of the IFT and envelope theorem for the case of multiple
endogenous variables. Then summarize the steps involved in establishing the
existence of a unique optimal vector,
Econ 380
Math Econ
Skillman
Fall 2013
Paper and Class Presentation Assignment
As I mentioned in class, the idea behind this assignment is for you to develop a short
(typically 7-10 double-spaced pages) extension to a theoretical article found in the
exist
Econ 380
Math Econ
Skillman
Fall 2013
2nd PRACTICE EXAM Suggested Answers
3. A certain labor market has an upward-sloping supply curve represented by the inverse supply
function , where L is total labor supplied. The supply function is twice continuously
Econ 380
Math Econ
Skillman
Fall 2013
2nd PRACTICE EXAM Suggested Answers
1. For the case of price-discriminating monopoly with objective function , supposing that output
levels are chosen from the same compact subset of the non-negative real numbers, exp
Econ 380
Math Econ
Skillman
Fall 2013
2nd PRACTICE EXAM Suggested Answers
4. Suppose that an industry is made up of two firms, A and B, and that the profits of each firm
i
i
are given by the function P =p ( x A , xB , c) , which is twice continuously diff
ECON 380
Math Econ
Skillman
Fall 2013
Problem Set 7
X
1. A utility function U =u ( x), x n is said to be concave if for all x, x X and scalars
+
) tf ( x ) +(1 - t ) f ( x) . The function is said to be strictly concave if this
t ( 0,1) , f (tx +(1 - t ) x
Econ 380
Math Econ
Skillman
Fall 2013
Problem Set 6
1. Derive the meet and join for the following pairs of points:
A) x = 5, y = 3
B) x = (12, 5), y = (3, 9)
C) x, y =ax, a > 1
2. Determine if each of the following sets are sublattices of 2 .
A)
[0,
cfw_
Does reading about current affairs help to understand economics?
Explain a piece of financial news and its importance.
Today's big news offers a good way to study economics. One of the simplest ways
to understand economics is to observe the economy of nat
Lower Oil Prices Carry Geopolitical Consequences
Analysis
Summary
Editor's Note: The recent drop in global oil prices is affecting economies around the world. This
series examines the reasons behind the falling prices and their effects on major energy con
The "LIBOR" index used for a loan (arrived at, usually by the choice of the borrower) is either
the "monthly" LIBOR or "quarterly" or "3-month" LIBOR.
The Monthly LIBOR is set and re-set every 30-days while the Quarterly LIBOR is set and re-set
every 90 d
ECON 380
Math Econ
Skillman
Fall 2013
Second ExamSuggested Answers
Two workers in a production team contribute labor effort , (with ), to the creation of output x via
the twice continuously differentiable production function , where m is a state variable
ECON 380
Math Econ
Skillman
Fall 2013
Second ExamSuggested Answers
4. Suppose now that each worker receives half of total team output, so that each workers
income is given by . Use this fact to express each workers payoff solely as a function of effort
le
Econ 380
Math Econ
Skillman
Fall 2013
Problem Set 2
1. The relevance of the first two conditions for the implicit function theorem (IFT), that
the behavioral function be continuously differentiable and have a value of zero at some
critical point, seems pr
Econ 380
Math Econ
Skillman
Fall 2013
Problem Set 3
1. Demonstrate the following properties of the expectation operator cfw_ for the case of both
discretely-valued (using summation) and continuously-valued (using integration) random
variables z:
c , where
Econ 380
Math Econ
Skillman
Fall 2013
Optimization with One Choice Variable: The Rankability Approach
We begin by studying the problem faced by a decision-maker trying to choose the optimal level
of a given economic variable in a specific economic environ
Problem Set 5Suggested answers
1. Suppose that price adjustments over time in a given market are expressed by the equation
pt +1 = pt +k [ D ( pt , I ) - S ( pt , w) ] , p indicates the market price; t denotes time period; k is a
positive constant indicat
1. Imagine the problem of a hypothetical individual trying to maximize an objective (say,
profit) defined as a function of a scalar-valued choice variable and a (possibly vectorvalued) state variable drawn from a compact sublattice (which just means there
Econ 380
Math Econ
Skillman
Fall 2013
Equilibrium Analysis and Fixed Points
In analyzing the tendencies of given economic systems, economists generally start by identifying
conditions under which they can be said to be in equilibrium, a condition in which
Problem Set 5
1. Suppose that price adjustments over time in a given market are expressed by the equation
pt +1 = pt +k [ D ( pt , I ) - S ( pt , w) ] , p indicates the market price; t denotes time period; k is a
positive constant indicating the speed of
ECON 380
Math Econ
Skillman
Fall 2013
Second ExamSuggested Answers
3. What additional conditions suffice to ensure the existence of a unique interior solution?
Explain. Given these conditions, derive the corresponding first- and second-order conditions fo
ECON 380
Math Econ
Skillman
Fall 2013
Second ExamSuggested Answers
7. Assuming existence of a Nash equilibrium, what additional condition(s) suffice to ensure that
the Nash equilibrium is unique? Illustrate and explain. Given this set of conditions, deriv
The term, "Leveraged Finance" refers to the secondary markets in high-yield (lower credit-rates)
business loans.
Banks which make these loans typically do not hold on to them for the entire duration of the
loans. As soon as possible after originating the