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
0
votes
1 answer
Why does the Paraeto Principle actually work? (The 80-20 Rule)
So, in economics, (and now expanding to other fields too, most significantly marketing tho I suppose commerce is but an extension of economical thoughts), there is a very widely held principle that 80% of the output comes from 20% of the input. As…
0
votes
0 answers
How was the return on investment calculated
This result was found in What Would You Pay for an Extra Year of Life?. But how was the 5.8% calculated?
Here is the excerpt:
What’s the Return on Investment? I know there’s a lot more involved in
exercising than merely putting in hours. But to…
Daniel
- 1
0
votes
0 answers
Why use Price Elasticity of Demand rather than just $\frac{dR}{dp}$?
I'm helping a family friend with an introductory business mathematics course; I have no background in economics, so I've been previewing the applications covered in her textbook, and just read about the concept of elasticity.
The derivation of the…
A.J.
- 3,892
0
votes
0 answers
Lending under VAR constraint
After working on this problem for several hours I still can’t wrap my head around how I would determine the lending volume taking into account probability of a solvency of 95%. I know how to calculate maximum lending volume L =< E/(1-(1-x)R)”, but…
0
votes
1 answer
Calculating the economic growth after depositing money
Someone deposits 100 a month into an account from year 0 to 21, then he stops depositing after year 21 and allows it to grow to age 65 at an interest rate of 4.75% per year.
I need to calculate $F_{65}$. Then I need to identify how much money was…
user130306
- 1,890
0
votes
1 answer
Wage-setting curve?
I am required to draw the graph of the following labor market equations:
Wage-Setting (WS): $W=P^e.(1-0.1u+0.7z)$
Price-Setting (PS): $P=(1+0.44)W$
How should be graph be drawn? I am confused by the so many unknowns here. The graph is supposed to…
0
votes
1 answer
Cost function and conditional input demand functions
I need help finding the cost function and input demand functions from the following production function: $$f(x_1,x_2)=\min(2x_1+x_2,x_1+2x_2).$$
The proposed answer I am seeing from my professor is: $$c(w_1,w_2,y)=\min \left(w_1, w_2,…
Debbie
- 5
- 2
0
votes
1 answer
Equilibrium interest rate
There are two countries in the whole world: Bolivia and Peru.
The aggregated investements in Bolivia is $I^B$ And in Peru they are $I^P$ (They are both exogenous).
The savings for Bolivia, where $B,b > 0$, are representet by: $S^B=B+br$
And for Peru…
0
votes
0 answers
Why is the GST for the wholesaler based on the marked price? We don't know if that is the cost price.
The price of a sewing machine is Rs.40000.The wholesaler allows a discount of 10% on it to the shopkeeper. The shopkeeper sells the sewing machine to a customer at a discount of 5% on the marked price. GST is charged at the rate of 28% .The sales…
Bongo Man
- 320
0
votes
0 answers
Economics Question - Days Forward Coverage Formula
I am trying to replicate a built-in function in our application that calculates Days Forward Coverage (How many days can your supply fulfill demands in a given horizon).
I know how to arrive at the desired result which is by manually counting the…
Brilight
- 1
0
votes
0 answers
What is my mistake here? I was trying to find F/G factor here
I was trying to derive an expression for F/G factor here for homework. I have attached my working in this picture. I always end up with a (1+i) in the numerator which is not in the actual formula. What am I doing wrong here? I have been working on…
0
votes
2 answers
Proving that $\exp(-x^2-y^2)$ is a strictly quasi-concave function
Prove that
$$f(x,y)=\exp(-x^2-y^2)$$ is a strictly quasi-concave function, that is,$\forall (x_i,y_i)\in \Re^2, (x_i,y_i)\neq (x_j,y_j), \lambda\in(0,1)$,
$$f(\lambda x_1+(1-\lambda) x_2,\lambda y_1+(1-\lambda)…
bluemaster
- 4,187
0
votes
1 answer
Price Response Function vs Willingness to Pay vs Price Response Function
Perhaps better suited for another Stack Exchange community, but I'm confused on three different economics terms and seek clarification. The terms are "Demand Curve, "Price Response Function", and "Willingness to Pay".
I had thought that the demand…
jbuddy_13
- 233
0
votes
0 answers
Find demand function $Q_2$ assuming it is a simple quadratic function.
The demand function $Q_1 = 80 − 4P_1$ intersects another demand function $Q_2$ at $P_1 = 5$. If
the elasticity of the second demand function at that point is one-fourth of that of the first
one, find $Q_2$ assuming it is a simple quadratic…
ALMEra
- 357
0
votes
1 answer
How to determine the MU in economics?
I currently have a table like so:
Hours spent on Activity X | Total Utility
120
220
300
360
396
412
I know that Marginal Utility is calculated use slope formulate (delta Y / delta X).
I am asked to calculate the MU for 5 hours:
So in this case,…
0xFF
- 319