The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Hong Kong University of Science and Technology
Midterm Exam
Duration: 1:30
ECON5130, 201411, S. Wang
Question 1 (GE, 15 points, 30min). No production. There are two consumers A and B with
utility functions and endowments:
.
(a) Let the prices be
and
.
Fi
The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Problem Set 9
Micro Analysis, S. Wang
Question 9.1. Suppose that a seller is selling a product to a buyer. The seller has type
which the buyer does not know. The buyer only knows that the type has density function
on
The buyer knows that the relationship
The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Problem Set 8
Micro Analysis, S. Wang
Question 8.1 (Akerlof). In the Akerlof model, we now suppose that the buyers can be guaranteed a minimum quality of the car by inspection and test drive. Specifically, instead of the
for used cars in the market, suppo
The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Problem Set 7
Micro Analysis, S. Wang
Try to do more problems in MWG (1995), Chapters 79.
Question 7.1 (MixedStrategy Nash Equilibrium) (PhD). A principal hires an agent to perform some service at a price (which is supposed to equal the cost of the servi
The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Problem Set 4
Micro Analysis, S. Wang
Question 4.1. There are two consumers A and B with utility functions and endowments:
Calculate the GE price(s) and allocation(s).
Question 4.2 (PhD). We have
agents with identical strictly concave utility functions. T
The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Course Website
www.bm.ust.hk/~sswang/513/. The username is 513x. Slides, reading materials and problem sets
are there. All the slides shown in class are downloadable from this website.
Micro Analysis
ECON5130, Fall 2015
3. Course Outline
Topics
Neoclassic
The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Chapter 11. Mechanism Design
Symmetrically, type
chooses
if
Summary: motivation, revelation principle, examples, direct mechanism, optimal allocation.
We call these two conditions the IC conditions. By them, each consumer will voluntarily report his true
The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Chapter 10. Market Information
Hence, she will sell her car,
S. Wang, HKUST, 2013
What is the issue? Asymmetric information among traders market failure and inefficiency. Examples in reality: medical insurance, car insurance, job search, etc.
Summary:
, i
The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Chapter 7. ImperfectInformation Games
by Susheng Wang, HKUST, 2014
References: MWG (1995, Chapters 79) and Wang (2012, Chapter 7).
Summary:
Two game forms: extensive form and normal form.
1) Each node belongs to one and only one information set. Denote
The Hong Kong University of Science and Technology
Microeconomic Analysis
ECONOMICS 5130

Fall 2015
Given
implies
Chapter 1. Neoclassical Economics
1. Producer Theory
, we have
. By the quasiconvexity of
the FOC guarantees optimality. The FOC
i.e., the price ratio equals the MRT, which is the tangency condition.
1.1. Technology
Efficient Production
inp