Top new questions this week:
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Which one’s the correct definition of weak monotonicity? $(x \geq y \implies x \succeq y) \land (x > y \implies x \succ y)$ $x \geq y \implies x \succeq y$ The first definition doesn’t allow $(3,…
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Theorem: If $X$ is countable, then any preference on $X$ has a utility representation with a range $(0,1)$. The stated proof in Rubinstein’s lecture notes: Proof: Let $\{x_n\}$ be an enumeration of …
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Frequently, extra handout to poor people during economic crisis is motivated by the multiplier effect. The reasoning goes something like this: since the recipients are poor they will consume the extra …
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I keep hearing that under perfect competition, an individual firm can sell ANY quantity as long as they sell at the equilibrium price. But this doesn’t make sense to me. For the market supply and …
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From microeconomics, $u$ is strictly quasi-concave if for all $x\ne y\in\mathbb{R}^2_+$ and $t \in (0,1)$, if $u(x)\ge u(y)$, then $u(tx + (1-t)y)>u(y)$. You may also check the figure below. Here …
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I read the Cryptocurrency Investing for Dummies book’s chapter about ICOs (Initial Coin Offerings), which are similar to IPOs but instead of stock, the company issues its own themed crypto to …
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I’m trying to understand how to solve an exercise about income and substitution effects. I got the theory, I guess, but can’t get the maths. One of the steps would be to put in a system the equation …
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Greatest hits from previous weeks:
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Given this question: National income is increasing by 1.5% a year and population by 2.5% a year. What is the rate of growth of per capita income? Attempt: Since per capita income is GDP/ …
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Economists assume that consumers have a set of preferences that they use to guide them in choosing between goods. These preferences have to satisfy three properties: completeness, transitivity and “…
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We know that the money today is fiat currency, that it is money because the government says it’s so. So when new money is printed or loaned out to the commercial banks by buying treasury bonds, …
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I presume it’s because they’re price makers, but this doesn’t really answer much. Furethermore, in a monopoly is it Marginal Cost or Long run marginal cost that’s horizontal?
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I was reading the ISO 10962 (the 2015 version) which classifies financial instruments. In the Collective Invesment Vehicle (CIVs) they separe them in: Standard Funds Hedge Funds REIT ETF Pension …
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Many folks speak about potential stock market crashes when central banks raise interest rates. I am not a graduate economist nor do I pretend to understand it, but I am definitely curious about what’…
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When trying maximize the utility having a cobb-douglas utility function $u=x_1^ax_2^b$, with $a+b = 1$, I found the following formulas (Wikipedia: Marshallian Demand): $x_1 = \frac{am}{p_1}\\ x_2 = \…
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Can you answer these questions?
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I’m reading the book “Multiagent systems: Algorithmic, game theoretic and logical foundations” by Leyton-Brown and Shoham. Since this is a game theory question I thought it was best to ask …
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I heard a lecturer saying predicting prices is easier than predicting fundamentals (eg. GDP). I assume that’s because prices are usually non-stationary? Does nonstationarity makes series more …
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When the central bank wants to reduce the money supply, it can sell bonds. That way, the money supply reduces by the amount paid for the bonds. The buyer will have bonds instead of cash. The bonds can …
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