Intermediate Micro Lecture Notes
... marginal and calculus arguments. There is, however, one qualification. The utility function that represents the preferences is not unique. Remark 2.8. If u represents preferences, then for any increasing function f : R → R, f (u(x)) also represents the same preference ranking In the previous section ...
... marginal and calculus arguments. There is, however, one qualification. The utility function that represents the preferences is not unique. Remark 2.8. If u represents preferences, then for any increasing function f : R → R, f (u(x)) also represents the same preference ranking In the previous section ...
Economics - Edinburgh Business School
... In many underdeveloped countries in the world, the problem of scarcity is stark and striking. Insufficient income is generated to keep people alive for very long: children starve and die; medical services are non-existent; housing and sanitation consist of cardboard boxes and open sewers; life is ‘n ...
... In many underdeveloped countries in the world, the problem of scarcity is stark and striking. Insufficient income is generated to keep people alive for very long: children starve and die; medical services are non-existent; housing and sanitation consist of cardboard boxes and open sewers; life is ‘n ...
Document
... goods, given the price of the other and given total income, a consumer would optimally purchase different quantities of the two goods. A change in the price of one of the goods will alter the slope of the budget line because a different amount of the good can be purchased with a given level of incom ...
... goods, given the price of the other and given total income, a consumer would optimally purchase different quantities of the two goods. A change in the price of one of the goods will alter the slope of the budget line because a different amount of the good can be purchased with a given level of incom ...
Practice Questions and Answers from Lesson III
... c. Now suppose that, if it chooses to, the movie theater can price-discriminate between students and professors by requiring students to show their student ID. If the movie theater charges students $5 and professors $10, how much profit will the movie theater make? How large is consumer surplus? Ans ...
... c. Now suppose that, if it chooses to, the movie theater can price-discriminate between students and professors by requiring students to show their student ID. If the movie theater charges students $5 and professors $10, how much profit will the movie theater make? How large is consumer surplus? Ans ...
Consumer Choice
... point along the budget line that gives him a higher utility than all the others? This is where your instructor’s preferences come in. There are two theories of consumer decision making, and they share much in common. First, both assume that preferences are rational. Second, both assume that the cons ...
... point along the budget line that gives him a higher utility than all the others? This is where your instructor’s preferences come in. There are two theories of consumer decision making, and they share much in common. First, both assume that preferences are rational. Second, both assume that the cons ...
2. Demand and Supply as Consequences of Net Benefit
... B. For most purposes in this class and other economics classes fixed costs are ignored, because although they may affect profits, they do not affect output decisions. w The distinction is most important for Marshallian representations of long run equilibrium. w We’ll mostly be using the Ricardian re ...
... B. For most purposes in this class and other economics classes fixed costs are ignored, because although they may affect profits, they do not affect output decisions. w The distinction is most important for Marshallian representations of long run equilibrium. w We’ll mostly be using the Ricardian re ...
Answers to Micro End-of-Chapter Questions 1
... 7. a. The limitation of medallions likely increases the price of taxi medallions because it creates a monopoly position for medallion holders. There is no threat of new suppliers to compete away profits. Since the demand for taxies is always shifting to the right as the population grows, the relativ ...
... 7. a. The limitation of medallions likely increases the price of taxi medallions because it creates a monopoly position for medallion holders. There is no threat of new suppliers to compete away profits. Since the demand for taxies is always shifting to the right as the population grows, the relativ ...
Supply and Demand
... which we assign an “amount” of utility, therefore, are arbitrary, representing a relative value. Total utility is the aggregate sum of satisfaction or benefit that an individual gains from consuming a given amount of goods or services in an economy. The amount of a person's total utility corresponds ...
... which we assign an “amount” of utility, therefore, are arbitrary, representing a relative value. Total utility is the aggregate sum of satisfaction or benefit that an individual gains from consuming a given amount of goods or services in an economy. The amount of a person's total utility corresponds ...
COMPETITION, CONSUMER WELFARE, AND THE SOCIAL COST
... II. RECONSIDERING THE DEADWEIGHT LOSS AS THE SOCIAL COST OF MONOPOLY By now, most economists agree as to the nature of the problem posed by monopoly and market power. A monopolist who cannot price-discriminate has an incentive to reduce output and charge a price higher than marginal cost, and in tu ...
... II. RECONSIDERING THE DEADWEIGHT LOSS AS THE SOCIAL COST OF MONOPOLY By now, most economists agree as to the nature of the problem posed by monopoly and market power. A monopolist who cannot price-discriminate has an incentive to reduce output and charge a price higher than marginal cost, and in tu ...