292 Answered Questions for the topic microeconomics

Microeconomics Business Theory Taxation

05/24/19

Monopoly and Taxes (Nicholson Exercise)?

Hello I'm working through **Microeconomic Theory : Basic Principles and Extensions** of Nicholson and Snyder 10e, for an exam and I fail to get how to answer this question (p.517) :> A specific... more
Microeconomics Business Theory

05/24/19

Implication of the concavity of u?

>Suppose that we have the following inequality: >$u( y- d) - u(y-d') \\ge u(y' - d) - u( y' -d')$.>The concavity of $u$ together with $y\\le y'$ then implies that $d \\le d'$.I sometimes... more
Microeconomics Economics

05/15/19

Consumers affect which goods and services are produced because they

Consumers affect

05/11/19

What is a Pareto Optimal Allocation and How do we use an Edgeworth box to Show it?

How can we use an edgeworth box to see if an allocation is Pareto Optimal? What doe Pareto optimal mean?

05/11/19

The Gains from forming a Free Trade Area or Customs Union Part 1

Suppose Two countries have identical demands for a product. Call it textiles. One is much better at producing Textiles. Suppose Demand is give as P = 40- (1/25) P The Supply Curve for... more
Microeconomics Economics

05/11/19

I know the answer when it is price elastic, but what changes when it is price inelastic? Please explain and which option is it?

Which of the following statement is correct?A) Demand is more price inelastic than supply and consumers bear a larger portion of the tax burden.B) Demand is more price inelastic than supply and... more
Microeconomics Economics

05/10/19

Import and Export - Microeconomics

If the world price is lower than the domestic autarky price of a good, then when the economy opens up to trade, the country will become an ______ of the good and the price of the good in the... more
Microeconomics

05/10/19

Inelastic tax burden. Microeconomics

Which of the following statement is correct?A) Demand is more price inelastic than supply and consumers bear a larger portion of the tax burden. B) Demand is more price inelastic than supply and... more

05/09/19

Full employment and Opportunity cost

If we are in a two country world and both countries are at full employment then they are on their respective production possibility frontier. Does that mean we are on the World Production... more
Microeconomics

05/05/19

What are FOCs and SOCs?

I keep seeing the terms first-order conditions and second-order conditions used in my undergrad economics class on production functions, monopolies, etc but I have no idea what these terms mean. It... more
Microeconomics Elasticity

05/05/19

Is elasticity purely an aggregate concept or can it be individualized?

First question here. I am not an economist by training, but I do quite a bit of econometric analysis in my job (my background is maths). I often get asked about elasticity, and I am familiar with... more
Microeconomics Finance Terminology

05/03/19

what is the difference between microeconomics and microfinance?

what is the difference between microeconomics and microfinance?I cannot understand the difference between the two terms
Microeconomics

05/03/19

Could leisure be considered a Giffen good?

One of my microeconomics fellow students asked this and it got me thinking. The leisure demand curve is a mirror of the labour supply curve. In the section where the Income Effect is greater than... more
Microeconomics

05/03/19

What is opportunity cost and can you provide an example?

04/25/19

In auction theory, why is my own valuation a random variable?

Auction theory typically (always?) begins by assuming that each bidder's valuation is a random variable. Now, it might seem reasonable (at least from a Bayesian perspective) for you to treat... more
Microeconomics

04/25/19

What are scarce goods?

Microeconomics

04/25/19

Why does supply equal demand?

My question is simple: in theory, why should we expect the total quantity that firms want to sell to be (at least approximately) equal to the total quantity that consumers want to buy?As I... more
Microeconomics Comparative Advantage

04/25/19

Intuition behind Comparative Advantange?

I already read and ask NOT about pp 52-54, *Principles of Microeconomics*, 7 Ed, 2014, by N Gregory Mankiw. I understand such numerical examples that corroborate Comparative Advantage, but how can... more
Microeconomics

04/25/19

When the convexity assumptions fail?

We constantly assume convexity in economics. Convexity of production sets, convexity of preferences etc. Is there literature that addresses when convexities fail? For example, is there any... more

04/25/19

Can a monopoly INCREASE the market surplus compared with a competitive market?

Monopolies are often blamed for DWLs(Dead Weight Losses), while competitive markets believed to work without DWLs (assuming zero taxes/subsidies and zero externalities). But I think I found an... more
Microeconomics

04/25/19

Why is elasticity not defined simply as the slope of the graph?

It makes more intuitive sense to me: as I increase the quantity, this is how much the price changes. Why is a much more complex formula used that takes into consideration the current quantity and... more
Microeconomics

04/24/19

What is it about certain business types that seem to restrict how much large they can grow?

For example, I've never heard of a large lawn-mowing corporation. Phone and computer repairers seem to consist mostly of 1 or two man operations. Wedding planners and photographers seem exclusively... more

04/24/19

Why do low-budget films charge the same amount at the box office as super-high budget films?

In most occurrences, lower production costs translate into lower sales costs. Obviously there are other factors that influence price, including perceived value (affected by advertising),... more

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