Econ 326 Problem Set 1
Due in class on Monday, September 23.
(60 Points)
This problem set tests the knowledge that you accumulated in the rst 3 lectures. The questions are a
combination of conceptual questions, essay questions and mathematical problems. G
Econ 326 Problem Set 4
Due No Later than Noon on Friday, November 8th.
(60 Points)
This problem set tests the knowledge that you have accumulated on choice under uncertainty and production. General rules for problem sets: show your work, write down the st
Econ 326 Problem Set 2
Due in section on Friday, October 4.
(60 Points)
This problem set tests the knowledge that you have accumulated on utility maximization. The questions
are a combination of conceptual questions, graphical questions and mathematical p
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 8
1
A Two-Period Model
The Consumption-Savings Decision
2
The Two-Period Consumption Model
Many consumers, live for 2 periods
Income is given exogenously
For simplicity, no consumpti
Surname 1
Name:
Professor:
Course:
Date:
GDP and Business in the United States
Explain how GDP is calculated.
The gross domestic product (GDP) provides the measure of the pecuniary value of
services and goods that a country produces in a given year. One o
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 4
1
Consumer Optimization Example
(Leading up to Labor Supply)
2
CONSUMER OPTIMIZATION EXAMPLE
Suppose , = ln + ln
The consumers problem is: (suppose = 0)
max lnc lnl
c,l
#
s. t. Pc
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 2
1
UTILITY FUNCTION
The benefit side of consumer optimization
We want to be able to say what is better or
preferred so we have to have a way to rank choices
Slope of utility curve =
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 3
1
RECAP
Last week: Consumer utility maximization
Utility function u(c,l) = benefit side of consumer optimization
Budget constraint = cost side of consumer optimization
Tangency co
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 5
1
A Static Model of the Macroeconomy
Three agents:
1. representative consumer = stand-in for all
consumers, sells labor and buys goods
2. representative firm = stand-in for all firms
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 6
1
Solving for the
Competitive Equilibrium
2
Competitive Equilibrium
Variables that are
determined outside
the model (taken as
given):
, , ,
Equations that
characterize agents and
mar
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 1
1
INTRODUCTION
No office hours on Jan 27 and Feb 3
- Instead: 2:00-3:00 pm, Jan 28 and Feb 4
No class lectures on Mar 5 and Apr 2
- Instead: outside presentation on Mar 5
2
TEACHING A
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 9
1
A Two-Period Model
The Consumers Problem
2
Consumption Optimization
Consumers utility:
, = + ( )
where (0,1) is the discount factor
(measuring degree of impatience)
Example: = ln
University of Maryland
Department of Economics
Spring 2014
ECON 325
INTERMEDIATE MACROECONOMIC ANALYSIS
MIDTERM 1 SOLUTION
100 POINTS
Question 1:
,
= > 0 for all c (strictly positive MU in c)
,
= > 0 for all l (strictly positive MU in l)
,
,
=
=
< 0 for a
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 11
1
A Two-Period Real Model
The Firm
2
The Firms Production Function
Current period:
= , ,
Future period:
= , ,
Inter-temporal evolution of capital stock:
= 1 + = 1
where = de
ECON 325
Intermediate Macroeconomic Analysis
Luminita Stevens
Lecture 12
1
A Two-Period Real Model
The Consumer
2
The Consumers Utility Function
Two-period utility with discount factor :
, + ,
where
and are consumption and leisure in the current perio
Economics 326: Preferences and
Utility
Ethan Kaplan
September 9, 2013
1
Preferences
1.0.1
Properties of Preferences
Start with choices. Choices reveal preference.
A preference relation
is a relation between two
bundles of goods and services
For example, t
Econ 326 Problem Set 5
Due in class on Wednesday, December 11.
(60 Points)
This problem set tests the knowledge that you have accumulated on cost curves, market equilibrium,
monopoly, and monopsony. There are total of 60 points possible. General rules for
Economics 326
(Utility, Marginal Utility, MRS,
Substitutes and Complements )
Ethan Kaplan
September 11, 2013
1
Utility
From last lecture: a utility function U (x; y ) is said
to represent preferences if for any bundles x1 and
x2, the utility function is h
Economics 326: Expected Utility
and the Economics of
Uncertainty
Ethan Kaplan
October 9, 2013
Outline
1. Probability Theory and Expected Value
2. The Saint Petersburg Paradox
3. Expected Utility
4. Demand for Assets
(a) Demand for Stocks
(b) Demand for In
Economics 326: Marshallian
Demand and Comparative
Statics
Ethan Kaplan
September 18, 2013
Outline
1. Utility Maximization: General Formulation
2. Marshallian Demand
3. Homogeneity of Degree Zero of Marshallian Demand
4. Engel Curves, Normal Goods, Luxury
Economics 326: Duality and the
Slutsky Decomposition
Ethan Kaplan
September 30, 2013
Outline
1. Convexity and Declining MRS
2. Duality and Hicksian Demand
3. Slutsky Decomposition
4. Net and Gross Substitutes and Complements
5. Elasticities
1
Convexity an
Economics 326: Prot
Maximization and Production
Ethan Kaplan
October 21, 2013
Outline
1. Prot Maximization
2. Production
1
Prot Maximiztion
What is prot maximization?
Firms decide how many inputs to purchase in order
to produce:
K for Kapital
L for Labo
Economics 326: Partial
Equilibrium and Market Clearing
Ethan Kaplan
November 20, 2013
Outline
1. Consumer and Producer Surplus
2. Simple Equilibria Comparative Statics
1
Equilibrium Comparative Statics
What happens when there are demand shifts?
Quantitie
Economics 326: Duality and
Supply
Ethan Kaplan
October 30, 2013
Outline
1. Cost Minimization
2. Cost Minimization: Example
3. Marginal, Average and Average Variable Cost Curves
4. Supply
1
Cost Minimization
The Dual approach to prot maximization is a two