Introductory Microeconomics: A Mathematical Approach
ECM A04

Spring 2014
Department of Management, UTSC
MGEB11 Quantitative Methods in Economics I  Lecture 06
Chapter 6  Continuous Random Variable & Distributions
1.
2.
3.
4.
General continuous random variable
Uniform distributed random variable
Normal distributed random vari
Introductory Microeconomics: A Mathematical Approach
ECM A04

Spring 2014
Department of Management, UTSC
MGEB11 Quantitative Methods in Economics I  Lecture 04
Chapter 5  Random Variable, Distribution, Expected Value, Variance
Can think of the demand for our product as a random variable.
Can think of the state of the economy
Introductory Microeconomics: A Mathematical Approach
ECM A04

Spring 2014
MGEB11 Quantitative Methods in Economics I
Lecture 03
In Class Exercise
Problem 1
Given 5 equally likely outcomes O1, O2, O3, O4, O5 and events A = cfw_O1, O2, B = cfw_O3, O4,
C = cfw_O2, O3, O4
(a) Find P[A]
(b) Find P[ A U B]. Are A and B mutually exclu
Introductory Microeconomics: A Mathematical Approach
ECM A04

Spring 2014
MGEB11 Quantitative Methods in Economics I
Lecture 08
Problem 1
You have been hired as a consultant for Petro Canada to conduct a statistical study to determine
how many petro points should be given to entice existing members of its loyalty Petro Points
C
Introductory Microeconomics: A Mathematical Approach
ECM A04

Spring 2014
MGEB11 Quantitative Methods in Economics I
Lecture 05
In Class Exercise
Problem 1
The probability that a customer entering a clothing store will make a purchase is 0.3.
(a) If 3 people walk into the store, what is prob. 2 will buy something?
(b) Construct
Introductory Microeconomics: A Mathematical Approach
ECM A04

Spring 2014
MGEB11 Quantitative Methods in Economics I
Lecture 04
In Class Exercise
Problem 1
(a) You are at the casino, there is a game where the dealer rolls a die and if he rolls your number
you win. You bet #6. What is probability you win?
(b) Suppose you found o
Introductory Microeconomics: A Mathematical Approach
ECM A04

Spring 2014
MGEB11 Quantitative Methods in Economics I
Lecture 01
In Class Exercise
Problem 1
Create a Stem & Leaf plot for the following data. 11.3, 9.6, 10.4, 7.5, 8.3, 10.5, 10.0, 9.3, 8.1, 7.7, 7.5, 8.4, 6.3, 8.8.
Problem 2
Recently, several players complained ab
Introductory Microeconomics: A Mathematical Approach
ECM A04

Spring 2014
MGEB11 Quantitative Methods in Economics I
Lecture 02
In Class Exercise
Problem 1
The Coop office at a department keeps track of the number of students placed with jobs each
month. Below is a sample of 6 months data. Determine the sample mean, standard d
Introductory Microeconomics: A Mathematical Approach
ECM A04

Spring 2014
Sept 14, 2013lecture 01
Lectures posted on UTSC intranet every Sunday
First test
25%
Second test 25%
Final exam 50%
*7th, 8th, or 9th December
Tests: mostly MC (10 choices), problembased rather than memorization, some theory
questions
Tests can be wipe
ECMA05 lecture 1
Every 45 years market economies experience a depression
When they do governments must act.
Inflation in 70s, many people defended this by saying it happened because governments
fail.
Unemployment in Canada last year?
All demand functions
1
ECMA06 Open Economy (Part 2)
Open Economy (Part 2)
Outline
The AE Model the open economy version.
Discuss the effectiveness of monetary and fiscal policies
under flexible exchange rate.
Discuss the effectiveness of monetary and fiscal policies
under fix
1
ECMA06 Open Economy (Part 1)
Open Economy (Part 1)
Outline
Introduce the foreign exchange market.
Discuss factors that affect demand for and supply of a
countrys currency.
The foreign exchange market vs. the money market.
Exchange rate determination.
Th
1
ECMA06 Stabilization Policy & The Introduction of Open Economy
Stabilization Policy & The Introduction of Open Economy
Outline
Discuss the effectiveness of monetary policy in affecting output.
Compare how fiscal & monetary policies affect AD.
Use of fis
1
ECMA06 Banking System and Monetary Policy
Banking System and Monetary Policy
Outline
Commercial bank vs. central bank.
The balance sheet of a commercial bank.
Discuss how the banking system generates money.
The banking system and the implications on
1
ECMA06 Money, Bond Pricing, & Interest Rate
Money, Bond Pricing, and Interest Rate
Outline
The cost of holding money and the demand for money.
The relationship between bond prices & interest rates.
The relationship between interest rate & investment.
Ho
1
ECMA06 The ASAD Model in the Long Run
The ASAD Model in the Long Run & Bringing Money
into the Model
Outline
Discuss how wages enter the ADAS model.
Discuss the natural adjustment mechanism from the short
run to the long run.
Discuss the natural adju
1
ECMA06 Aggregate Expenditure (with government and foreign sector)
Aggregate Expenditure (continued) with Government &
Foreign Sector
Outline
Extend the simple AE model by including government and
foreign sector in the model.
Discuss national saving in a
ECMA06 Aggregate Expenditure
1
Aggregate Expenditure The Simplest ShortRun Model
Outline
Develop a simple model that determines equilibrium
national income.
The simple model consists of consumption and investment
only (will include the government and t
ECMA04
Tutorial #1  Week 2
Answers
1.
The opportunity cost of anything is the value of the next best alternative
given up; in other words, the value of what was sacrificed in order to obtain
that thing. The opportunity cost of going to economics class in
ECMA04
Tutorial #3
Answers
1(a)
We know that we obtain the demand curve by setting P = MU.
Therefore, demand is P = dU/dX = 5X0.5
If P = 1, then X0.5 = 1/5, or X = 25.
(b)
Consumer Surplus (CS) = Utility received from consumption of the good minus
the a
c) Electricity is an input into aluminum production, so the fall in the price of
electricity causes the supply curve of the commodity (aluminum) to shift
down and to the right; the demand curve does not move. Thus, equilibrium
price of aluminum falls and
ECMA04
Tutorial #2
Answers
1. a)
Of course, the answer depends on normality. If tomatoes are normal,
a rise in income increases demand, increasing both price and quantity
purchased
b)
but if tomatoes are inferior, a rise in income decreases demand,
decrea
Week 10 (Nov 14, Nov 16)
Topics: Much of the Canadian economy is neither perfectly competitive, nor
monopolistic. The rest of the Canadian economy can be better understood with models
that emphasize strategic behaviour with uncertain outcomes. We briefly