Solutions Homework 3
May 29, 2011
Answers are in italics below each question
1. Duration and Maturity for Discount Bonds. A bond that makes semi-annual
payments, has Yield to Maturity of 20% and coupon rate of 4% (both rates are APR
compounded semi-annual
Sample solutions for Problem Set 4
Price Theory and Market Design
E. Glen Weyl
University of Chicago
Fall 2012
Problem 1
This problem is inspired by the research of my wife, Alisha Holland, for her dissertation, Forbearance
as Redistribution. You can lear
Sample solutions for Problem Set 3
Price Theory and Market Design
E. Glen Weyl
University of Chicago
Fall 2012
Problem 1
Part a)
The constant elasticity of substitution production function with degree of homogeneity k and equal
s1
s1
hs
s1
factor shares i
Sample solutions for Problem Set 2
Price Theory and Market Design
E. Glen Weyl
University of Chicago
Fall 2012
Problem 1
Part a)
1
1
By symmetry, N of the population joins each culture. The distance between cultures is N and the
worst-o individual is the
Sample solutions for Problem Set 1
Price Theory and Market Design
E. Glen Weyl
University of Chicago
Fall 2012
Problem 1
I divide my sample response into four parts, corresponding to each of the rst three scheme and
the invented fourth.
Schema I
A classic
Problem Set 6
Price Theory and Market Design, Fall 2012
E. Glen Weyl
This problem set is due at the beginning of the optional class on Tuesday, December 4.
1. (35 points) This problem extends the analysis you undertook in the first problem of
Problem Set
Problem Set 5
Price Theory and Market Design, Fall 2012
E. Glen Weyl
This problem set is due at the beginning of class on Tuesday, November 20.
1. (22 points) This problem is based on a discussion given by Jon Baker at an
Econometric Society session I hos
Problem Set 4
Price Theory and Market Design, Fall 2012
E. Glen Weyl
This problem set is due at the beginning of class on Tuesday, November 13.
1. (35 points) Suppose that in a developing country, there is a mass 1 of who
individuals who only differ in th
Problem Set 3
Price Theory and Market Design, Fall 2012
E. Glen Weyl
This problem set is due at the beginning of class on Thursday, October 25.
1. (36 points) Suppose there are two final commodities (butter and guns), two inputs
(capital and labor) and tw
Problem Set 2
Price Theory and Market Design, Fall 2012
E. Glen Weyl
This problem set is due at the beginning of class on Thursday, October 18.
1. (40 points) Throughout this problem, individuals live on a unit circumference circle
(not a circle of radius
Problem Set 1
Price Theory and Market Design, Fall 2012
E. Glen Weyl
This problem set is due at the beginning of class on Thursday, October 11.
1. (25 points) By reading through their abstracts and maybe their introductions, choose
three academic papers f
Sample solutions for Midterm Exam
Price Theory and Market Design
E. Glen Weyl
University of Chicago
Fall 2012
True, False or Uncertain
1)
True. The fact that substitutes and complements for pork belly consumption are durable means
that the demand and supp
Midterm Exam
Price Theory and Market Design
Fall 2012
Eric Glen Weyl
Exam takers name:
This exam will be distributed electronically at the 10pm Friday November 2 and due
10pm Sunday November 4; you will thus have 48 hours to complete it. It can be submitt
Solutions Homework 6
May 29, 2011
Answers are in italics below each question
1. Buy the underlying stock or the Call? Suppose you think that Wal-Marts
stock is going to appreciate substantially in value in the next year. Say the stocks
current price, S0 ,
Solutions Homework 4
May 29, 2011
Answers are in italics below each question
1. Portfolio arithmetics. Consider the case of two assets 1 and 2 with expected
returns 6% and 14% and standard deviations 8% and 18% respectively. We will
form several portfolio
Sample solution for Final Exam
Price Theory and Market Design
E. Glen Weyl
University of Chicago
Fall 2012
True, False or Uncertain
1)
True. Optimal tax rates are very similar to optimal two-part taris, where income replaces quantity
purchased. We know fr
Final Exam
Price Theory and Market Design
Fall 2012
Eric Glen Weyl
Exam takers name:
This exam will be distributed electronically at the 10pm Friday December 7 and due
10pm Sunday December 9; you will thus have 48 hours to complete it. It can be submitted
Sample solutions for Problem Set 6
Price Theory and Market Design
E. Glen Weyl
University of Chicago
Fall 2012
Problem 1
Part a)
If an individual has w < (>)p the cheapest way for her to obtain the good is to steal (buy) it. She
will obtain the good in so
Sample solutions for Problem Set 5
Price Theory and Market Design
E. Glen Weyl
University of Chicago
Fall 2012
Problem 1
Part a)
The Internet makes it much easier for consumers to shop for the product oerings that are most
suited to them. It also makes en