Econ 205
Problem Set 3
Prof Taylor
Problem Set 3
1. Suppose Cartman consumes only slices of pizza x and pieces of fried chicken y and has preferences
represented by U (x, y) = x + y. Suppose that the price of pizza is initially p0X = 2, the price of chick
Econ 205
Problem set 4
Prof. Taylor
Problem Set 4
1. Alison and Carrem both like to eat Heels (x) and Turtles (y).1 Their utility functions are identical:
U (x, y) = 10x + y 2 .
(a) Calculate Alison and Carrems Marshallian and Hicksian demands for Heels a
Econ 205
Problem set 4
Prof. Taylor
Problem Set 4
1. Alison and Carrem both like to eat Heels (x) and Turtles (y).1 Their utility functions are identical:
U (x, y) = 10x + y 2 .
(a) Calculate Alison and Carrems Marshallian and Hicksian demands for Heels a
Econ 205, Spring 2013:
Second Mid-Term Exam
Write your name, Duke ID, and section number below. By doing this you pledge to obey and
follow the Duke University Honor Code.
Name:
Duke ID:
Section:
Instructions: Relax! The exam consists of four questions. A
Econ 205
Rachel Kranton
Spring 2014
Econ 205, Spring 2014:
Final Exam
April 28, 2014
Write your name and NetID below. By doing this you pledge to obey and follow the Duke University
Honor Code.
Name:
NetID:
Instructions: Relax! The exam consists of six qu
Econ 205
Prof Kranton
Problem Set 3
Due: Feb 9, 2014 6pm
1. Consider an individual who has preferences over goods X and Y represented by the utility function:
U (x, y) = 25 + y 0.25(10 x)2
Normalize price of Y to 1 and denote the price of X (in terms of u
Econ 205
Prof Kranton
Problem Set 4
Due: February 16, 2014 6pm1
1. Suppose an individual is trying to decide between three dierent assets giving rise to three dierent
income streams. Asset A pays out $100 in the rst (t = 0) period and 0 in the second (t =
Econ 205
Prof Kranton
Problem Set 5
Due March 2, 2015 6 pm
1. Austin has preferences over hours of leisure h and sending text messages c that are represented by:
U (h, c) = 2 ln(h) + ln(c).
Suppose that Austin is endowed with 24 hours a day of leisure tim
Econ 205
Prof Kranton
Problem Set 9
Due April 20,6 pm
1. Suppose that an exchange economy consists of only two individuals with the following preferences:
U1 (x1 , y1 ) = min cfw_x1 , y1
U2 (x2 , y2 ) = max cfw_x2 , y2
The initial endowments of x and y
Econ 205
Problem Set 1
Prof Taylor
Problem Set 1
1. Consider a price taking rm that possesses production function q = f (l), where q is units of output
and l is units of labor employed. Suppose the rms prot max problem can be written:
max pf (l) wl,
l
whe
Substitution Effects with Free Public Transport Fares
Topic: Consumer Theory
Sub-Topic: Income and Substitution Effects
Reference: Cats, Oded, Triin Reimal, and Yusak Susilo. "Public Transport Pricing Policy".
Transportat
Are our preferences a preference relation?
Topic: Consumer Theory
Sub-Topic: Preferences
Source1: Iyengar, Sheena and Mark Lepper. 2000. " When Choice is Demotivating:
Can One Desire too Much of a Good Thing,"
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Compensating Behavior in the Presence of Cigarette Taxes
Topic: Consumer Theory
Sub-Topic: Taxation
Reference: Evans, William N., and Matthew C. Farrelly. "The Compensating Behavior Of Smokers:
Taxes, Tar, And Nicotine"
Valuing New Goods-Increased Product Variety at Online Booksellers
Topic: Consumer Theory
Sub-Topic: Compensating Variation
Source: Brynjolfsson, Erik, Yu Hu, and Michael D. Smith. "Consumer surplus in the
digital e
Econ 205
Prof Kranton
Problem Set 1
Due Date: Tuesday, Feb 2, 2016
1. Consider the following utility functions. Draw a typical indierence curve for each. If possible, give
the formula for the slope of the indierence curve. Demonstrate whether or not the u
Econ 205
Prof Kranton
Problem Set 6
Due Date: Tuesday, March 22, 2016
1. Indicate whether each of the following statements is necessarily true or false (i.e., not necessarily
true). Provide a brief justification for your answer in each case. (Answers with
Econ 205: Lecture 11
1
Profit Maximization and Supply
Short-Run supply
If a firm is small relative to the industry in which it operates, then it is appropriate to regard
it as a price taker in both its input and output markets. That is, it considers the i
Econ 205: Lecture 9
1
Production
Technology
Firms use many inputs in order to produce output, and most firms also produce several types
of output. For illustrative purposes, we will consider firms that use only two inputs, hours
of labor service, l, (whic
Econ 205: Lecture 10
1
Cost Concepts
Average and Marginal Costs
The long-run cost function is the value function C(w, v, q) that specifies the minimum expenditure necessary to produce q units of output when input prices are w and v. For notational
conveni
Econ 205
Prof Kranton
Problem Set 7
Due Date: Tuesday, March 29, 2016
1. Indicate whether each of the following statements is necessarily true or false (i.e., not necessarily
true). Provide a brief justification for your answer in each case. (Answers with
Econ 205
Prof Kranton
Problem Set 10
Due April 29, 6pm
1. Consider two individuals with the utility functions u1 (y) =
y and u2 (y) = y 1/3 .
00
(y)
(a) Let ri (y) := u
u0 (y) be defined as the Arrow-Pratt coefficient of absolute risk aversion for
individ