... Explain. (b) Show that any risk averse decision maker whose preference satisfies indepen- dence axiom must prefer L 2 to L 3 . 3. Question 3 (4 points) Suppose a monopolist with constant marginal costs prac- tices ...
... Explain. (b) Show that any risk averse decision maker whose preference satisfies indepen- dence axiom must prefer L 2 to L 3 . 3. Question 3 (4 points) Suppose a monopolist with constant marginal costs prac- tices ...
... u 2 (x, y 2 ) = 2 ln x + y 2 ...persons 1 and 2 when he buys x, and thinks only of his own utility maximization ...persons 1 and 2 buy? (b) Use the Samuelson ...
... The main theorem shows that the condition that a schools’ priority profile ≻ C has a common priority order for every type t ∈ T is sufficient for the existence of feasible assignments which are both fair and ...
... player 2 chooses X and q be a probability that player 1 chooses ...player 1 must be indi¤erent amongst choosing A and B, we obtain 2p = p + 3(1 p) , 4p = 3 , p = ...
... −1 , which is clearly decreasing in x. 2. Question 2 (5 points) (a) (i) No. Although her choice is not inconsistent with risk aversion, this infor- mation alone is not enough for us to judge if she ...
... (c) Solving the consumer problem you derived in (b), find the competitive equi- librium allocation. (d) Assume that the government tries to achieve the equitable allocation, i.e., each consumer receives two units of both ...
... St Petersburg Paradox (1) The most primitive way to evaluate a lottery is to calculate its mathematical expectation, i.e., E[p] = P s∈S p(s)s. Daniel Bernoulli first doubt this approach in ...
... with x = (y, z) where y is a scalar, z is an n-dimensional consumption vector, and V (·) is a real valued function. The consumption set X = R n +1 + . (a) Show that if V is concave, U is quasi-concave. (b) Show ...
... with x = (y, z) where y is a scalar, z is an n-dimensional consumption vector, and V (·) is a real valued function. The consumption set X = R n+1 + . (a) Show that if V is concave, U is quasi-concave. (b) Show ...
... with x = (y, z) where y is a scalar, z is an n-dimensional consumption vector, and V (·) is a real valued function. The consumption set X = R n+1 + . (a) Show that if V is concave, U is quasi-concave. (b) Show ...
... A good is called normal (resp. inferior) if consumption of it increases (resp. declines) as income increases, holding prices constant.. Show the following claims.[r] ...
... Let w = (w 1 , w 2 , w 3 , w 4 ) ≫ 0 be factor prices and y be an (target) output. (a) Does the production function exhibit increasing, constant or decreasing returns to scale? Explain. (b) Calculate the ...
... Using this minimax theorem, answer the following questions. (b) Show that Nash equilibria are interchangeable; if and are two Nash equilibria, then and are also Nash equilibria. (c) Show that each player’s payo¤ ...