For questions regarding the mathematical analysis of economic models and problems. This includes questions about the formulation or solution of models from microeconomics or macroeconomics.
Questions tagged [economics]
1602 questions
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Microeconomics : Total revenue for unit elasticity
I recently read in my microeconomics book that when elasticity = 1, total revenue remains the same. However, I am unable to follow this.
I have two questions on this concept:
Question#1-
Let's take an example: at equilibrium,
…
watchtower
- 123
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Profit Model from Ellison Glaeser 1997
Can someone help me understand the following profit maximization problem (from Ellison Glaeser 1997)?
Manufacturing plants choose where to locate each of $N$ plants in one of $M$ locations. The profit from locating plant $k$ in location $i$ is given…
jroot
- 11
- 2
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Price and price elasticity problem in Economics
I cannot figure out this problem, if anyone can just point me in the right direction that would be great.
The price is $\$20$ and the price elasticity changes from $-2$ to $-3.$ If $\$20$ was the optimal price at $-2$, then what is it at $-3$?
If…
thrtry3334
- 11
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Microeconomics: Calculating Tax Revenue and Tax incidence
Australian Government has imposed a tax on Beer. Assume that the tax on Beer is $20 per unit (a unit is a carton of drinks) Assume the demand and supply functions for cartons of Beers per week are: P=200 - 0.5Q and P=0.5Q.
Calculate the amount of…
Econ_newbie
- 101
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Average cost function and marginal cost function proof
I was wondering if someone could help me prove the following.
Let $A(Q)$ be an average cost function and $M(Q)$ the corresponding marginal cost function. Show that if $M(Q)>A(Q)>0$ then $A(Q)$ is strictly increasing.
user133993
- 651
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Welfare analysis after unit tax is imposed
image of welfare after tax
This is what the lecturer drew in my class. $S_T$ is supply curve after a tax of $t$ dollars per unit is imposed .But I don't understand several things.
1. He said the tax amount is from $P_T^* $ to $P_T^*-t$. But…
clarkson
- 1,907
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Simple algebra, economics
Using some algebraic manipulation the expression $\displaystyle\frac{P-W_1P_x}{W_2}$ is made into $\displaystyle \frac{1-W_1 \frac{P_x}{P}}{W_2}$. It says it is simply multiplied by $\displaystyle \frac{1}{P}$. I am not terribly fluent in algebra as…
Marcus
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How do I provide an intuitive argument for this economics question?
In Syldavia the economists find that (annual) household consumption $c$ is related to (annual) income $y$ by the formula $c=\alpha +\beta y$, where $\alpha>0$ and $0<\beta<1$. Because of this, they argue, inequality of consumption must be less than…
OGC
- 2,305
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Show that there exist prices at which agents can engage in mutually beneficial trades.
Consider an exchange economy with $2$ goods and $2m$ identical Households, but in this case each household has utility function $u(x_1,x_2)=x_{1}^2+x_{2}^2$, and endowments $w_1=w_2$. Show that there exist prices at which agents can engage in…
OGC
- 2,305
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Leontief Models: Characterizing efficient net outputs
Given a Leontief model with $n \times n$ input-output matrix $B$, whose diagonal elements are positive and off-diagonal elements are non-positive. There is a single unit of labor available to this economy. Let $x$ be the vector of labor allocated to…
tvk
- 1,364
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3 answers
Economics supply and demand question
If the market demand for shoes is given by $QD = 10000-250P$ and the supply is
$QS = 5000$, what is the equilibrium price of shoes? How many pairs of shoes will be sold?
Thanks in advance.
mr. chan
- 1
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Total differential Economics Application
Suppose we have a revenue function: $R= P*Y$ where $P=$ price and $Y=$ output and is a function of $P$ and $C$, $Y= Y(P,C)$. How could we write the total differential of $R$ with respect to $P$ and $C$?
Here's where I am at:
$$
dR= \frac{\partial…
user98167
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- 1
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Engineering Economics - Annual Cost Question
My question is as follows:
1.) An earth compactor costs $38,000 and has an economic life of 9 years. However, the purchaser needs it for only 1 project that will be completed in 3 years. At the end of the project, it can be sold for 1/2 its purchase…
Harin
- 9
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Very simple question about trace
In MSE in econometrics,
$$\mathrm{MSE}=E\| \hat{\theta}-\theta \|^2$…
signup
- 3
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Estimate the current elasticity and the current value
Consider the statemen
A manufacturer of aluminum doors is currently selling 500 doors per week at a price of \$85 each. If the price were lowered to \$80 each, an additional 70 doors per week could be sold.
I wanna find the current elasticity of…
Wrloord
- 1,626