ECON 200 - Fall 2013
Problem set 4
Readings for the 5th week of class Chapter 9 Hal Varians textbook, chapter 9 Victor
Limas lecture notes.
Preparation for the midterm Review your notes from class, Chapters 2 to 9 of the Hal
Varian textbook (you can skip
ECON 200 - Fall 2013
Problem set 6
Problem 1 - Expected utility Consider an entrepreneur who has an income stream equal
to I = 1, 000 dollars for sure plus a random component that will give her an additional 15% of
her income with probability 1 =
1
3
or a
Econ 20000 PS4
Suggested Solution
Prepared by
James Marrone, Ippei Shibata, Arvid Viane, and Alessandra Voena
October 30, 2013
Problem 1 (Duality)
max log(x1 ) + x2
cfw_x1 ,x2
s.t. p1 x1 + p2 x2
x 1 , x2
m
0
and
min p1 x1 + p2 x2
cfw_x1 ,x2
log(x1 ) + x
ECON 200 - Fall 2013
ECON 200 - Spring 2013
Final exam
NAME
SECTION
There are 4 required questions plus an extra-credit question. Each required question is worth
50 points for a total of 200 points. The extra credit question is worth a total of 20 points.
ECON 200 - Spring 2013
Problem set 3
Readings for the 4th week of class Chapters 7-8 of Hal Varians textbook, chapters 7-8
of Victor Limas lecture notes.
Problem 1 A consumer is facing the following utility maximization problem:
1
2
3
3
maxx1 ,x2 x1 x2
s.
ECON 200 (Autumn 2013): Problem Set 6 Solution
Ippei Shibata, Arvid Viaene, Alessandra Voena and James Marrone,.
December 2, 2013
Figure 1: Calvin needs to take ECON 200
Questions or comments: [email protected]
1
Problem 1
Part a
Lets denote the total i
ECON20000 In-Class Quiz 2
Instructor: Ging Cee Ng
Q1. [Algebraic] A monotonic transformation of a utility function is a utility function that represents
the same preferences as the original utility function. One implication is that the MRS of the original
Week 5 In-Class Quiz (Wednesday)
Instructor: Ging Cee Ng
Algebraic
1A. Use symmetry of Hicksian demand functions to show that the ratio of Hicksian cross-price elasticities is equal to the
ratio of shares.
1B. What is the implication of this result for l
Week 1 In-Class Quiz (Wednesday)
Instructor: Ging Cee Ng
Algebraic
(i) For the two-commodity world (X,Y), write the budget equation using "M" to denote income.
(ii) Solve the budget equation for Y.
(iii) What do the x-intercept, y-intercept, and slope of
Week 3 In-Class Quiz (Wednesday)
Instructor: Ging Cee Ng
Algebraic
(i) Write the consumer utility maximization problem for the two good case.
(ii) Write the Lagrangean, using lambda as the lagrange multiplier.
(iii) Take first order conditions.
(iv) Using
Week 4 In-Class Quiz (Wednesday)
Instructor: Ging Cee Ng
Algebraic
1A. Show that the weighted average of an individual's income elasticity equals 1, where the weights are the proportions
of the budget spent on each commodity.
Hint: totally dierentiate the
Week 7 In-Class Quiz (Wednesday)
Instructor: Ging Cee Ng
Algebraic
1. Derive the Slutsky Cross-Price equation with endowments by totally dierentiating the Marshallian demand function for
X when the consumer is endowed with both goods. Label the substituti
ECON20000 Lecture 1: The Budget Constraint
Instructor: Ging Cee Ng
Accompanying Reading: Varian Chapter 2 (Budget Constraint), pp 20-26
Economists are interested in problems that involve scarcity: how do individuals, rms, governments, societies make consu
ECON 200 - Fall 2013
Practice nal exam
Problem 1 A consumer is choosing between consuming a composite good c (which costs 1
dollar per unit) and leisure l. She can supply labor L up to an endowment of 12 hours a day at
a wage w = 10 dollars per hour. She
Problem Set 4: Solution Sketches
Evan Zuofu Liao
April 30, 2015
Q1
Hint: think about responses to incentives on different margins.
Q2
(a) Smoking price elasticity measures responses on the extensive margin, and consumption
price elasticity measures respon
The consumer's budget constraint does not change, because her income does not
allow her to purchase more than 5 books, so she cannot take advantage of the
discount.
The University should keep the purchasing power of the students into account
when designin
Question 3
a) This utility function represents the class of quasilinear preferences. The utility function is linear in x2
and non-linear in x1 , hence quasi-linear.
Figure 4: Indi"erence curves for quasilinear utility
b) Although this will become clearer
ECON 200 - Fall 2013
Practice midterm exam
Problem 1 Assume that a student is choosing between buying books (good 1 with price p1
each) and videogames (good 2 with price p2 each) at the University bookstore.
a) Allow income to be m = 30 dollars and prices
Week 8 In-Class Quiz (Wednesday)
Instructor: Ging Cee Ng
Algebraic
1. Set up (but do not solve!) the three requirements that (x*,y*) and prices (px,py) must satisfy to be a competitive
equilibrium: 1. Amy's problem, 2. Bob's problem, and 3. the Market Cle