296 Answered Questions for the topic microeconomics

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
Microeconomics

04/20/19

When do supply and demand curves shift?

Let's assume that the price of apples has risen and that the quantity of apples sold during the last couple of weeks has decreased. From that, we can infer that the supply curve must've shifted to... more
Microeconomics

04/16/19

Destruction in Exchange Economies?

I am reading about exchange economies and ran across something that is counter intuitive.How is it that in an exchange economy with no production that a person can make himself/herself better off... more
Microeconomics Elasticity

04/16/19

Why absolute value in elasticities and marginal rate of substitution?

This is a point I find very confusing and very hard to justify to students. Depending on the books, one finds many different conventions regarding the sign of elasticities and marginal rate of... more
Microeconomics Utility Consumer Theory

04/16/19

The relationship between the expenditure function and many others!?

I dont understand the relationships between Hicksian demand, walrasian demand (marshallian), the expenditure function and the indirect utility function (including the value function V(b)). I have... more

04/16/19

Are homothetic preferences monotonic?

I'm trying to understand intuitively what a homothetic preference is, and I am still not quite there. I understand the definition, that a homothetic preference implies that the slope of the... more
Microeconomics Profit Maximization

04/15/19

Why are firms taken to be profit-maximizing? Shouldn't that make them risk-neutral?

Intro texts normally explain that insurance firms (casinos, etc.) "work" by diversifying risk from many clients. Unsaid, then, seems to be that risk is bad for both firm and client.But why should a... more
Microeconomics History Economic Thought

04/15/19

Isoquant creator?

I was wondering if anyone had an idea about the first author to have mathematically computed an isoquant or at least the first occurrence of a drawn isoquant ? My best guess would be F. Edgeworth... more
Microeconomics

04/14/19

What is a subsidy and can you provide an example?

Microeconomics Wages Unemployment Firm

04/14/19

Why do firms losing money almost always reduce labor costs via layoffs instead of pay cuts?

At least in the United States, firms seem to almost always reduce labor costs via layoffs rather than pay cuts. Pay cuts are so rare that they're literally... more
Microeconomics Macroeconomics

04/12/19

What are the differences between microeconomics and macroeconomics?

Microeconomics Micro Data

04/11/19

In simple terms: what are the implications of homothetic and nonhomothetic consumer preferences?

I am looking for a simple explanation of the implication of having homothetic/nonhomethetic preferences in relation to consumers' preferences when consuming goods.
Microeconomics Producer Theory

04/11/19

Are There Giffen Inputs?

I am studying for my candidacy exams and I came across this question on a previous exam. The question is in the TFD (True, False, Debatable) section of the exam. The claim is: "There are no Giffen... more
Microeconomics Business Macroeconomics

04/09/19

Is business economics micro or macro or both?

Microeconomics

04/09/19

Microeconomics Question

4 goods = a,b,c,dwealth =12pa=1pb=1pc=2pd=2thus constraint is a+b+2c+2d=12maximise u = ab+cdsubject to constraint
Microeconomics Finance Corporate Finance

04/08/19

Where are bank loans in balance sheet?

I am looking at the balance sheet of Coca-Cola (https://www.marketwatch.com/investing/stock/coke/financials/balance-sheet), but I cannot guess where loans with banks are. These liabilities accounts... more

04/08/19

The 'Economic Man' (Reference Request)?

We are writing a paper about the 'economic man.' By this, we mean that the choices he makes epitomize a rational economic thinker. However, we also acknowledge the fact that there are other,... more
Microeconomics Consumer Theory

04/04/19

Differences between Hicksian and Slutskian approaches?

When deriving the substitution effect for both Slutskian and Hicksian definitions, a 'phantom' budget line is drawn.However, for a Slutskian definition, the 'phantom' budget line is drawn parallel... more
Microeconomics

04/04/19

Who is the father of microeconomics?

Microeconomics World History Anthropology

04/04/19

Why do economists ignore the most important things about money?

Money is a physical object or is treated as if it were a physical object. Physical objects have social properties. Physical objects (money) can be taken from their owners against the will of the... more

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