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.

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4 views

Gross Substitutes under continuous perturbations

Let $v_i(S)_{i \in [n], S \subseteq G}$ be a collection of Gross Substitute valuations. I am wondering if I can add a small perturbation to each valuation and still get Gross Substitute valuations. ...
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0answers
12 views

Envelope Theorem and Static Optimization

The Statement of the Problem: For fixed $r \gt 0$ and $m$, find the maximum value of $1-rx^2-y^2$ on the constraint set $x+y=m$. Find the value function $f^*(r,m)$ and compute $\frac{\partial ...
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1answer
6 views

Profit Function where total revenue is re-spent on production?

I'm trying to find a function that finds the net profit gain over multiple iterations. For example, if I produce a unit for 5 dollars , and can sell it for 8 dollars, I would have a net gain of 3 ...
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0answers
10 views

Identifying a subclass of the class of monotonic transformations

Let $u$ be a continuous function from $R$ to $R$. Then $v$ is called a positive monotonic transformation of $u$ if $u(x) < u(y)$ if and only if $v(x)<v(y)$ and similarly for greater than and ...
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3answers
36 views

How much is 6% a year in months?

I am currently in high school where we are learning about present value. I struggle with task like these: Say you get 6% interest each year, how much interest would that be each month?
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1answer
58 views

Can I embed $\mathbb R^{\mathbb N}$ with a partial order into $^\ast\mathbb{R}$ with the linear order?

Define a relation $\prec$ on $\mathbb R^{\mathbb N}$ as, For all $f, g \in \mathbb R^{\mathbb N} $, $f \prec g$, if for all $n \in \mathbb N$, $f(n) \leq g(n)$, and there exists a $m \in \mathbb ...
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1answer
10k views

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: ...
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0answers
9 views

Supply Curve and Consumer's Surplus Help

The following information is given: p=S(x)= 80e^(0.05x) ¯x=15 What I am struggling to figure out is how to obtain the value of ¯p I set S(x)=15 and got that ¯p was -33.47952, but am unsure if this ...
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0answers
16 views

How do I solve? [closed]

A firm faces the following inverse demand equation for the commodity it produces: P = 100 – Q where P represents the price/unit of the commodity ...
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5answers
264 views

A mathematical approach to economics

Are there books or papers where economics is formalized and studied very rigorously? I am very interested in this topic. I would preferably like free online books and/or papers, but that is not ...
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0answers
26 views

Perfect equilibrium - consumer, producer surplus

Inverse function of market demand for certain good is equal to $P=100-0.25Q$, inverse supply function is $P=20+0.55Q$. Calculate equilibrium price and quantity. Furthermore calculate consumer and ...
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0answers
25 views

Perfect competition - question about profits [closed]

Market is supplied by: 50 competitive companies all of them have relatively low costs given by an equation $C_l(q)=350+2q+q^2$ and by n companies of higher costs given by an equation ...
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2answers
27 views

Using Lagrange for finding Marshallian Demand

I want to find the marshallian demand function for the user function $u(x_1,x_2) = x_1^ax_2^{1-a}$ where $a \in (0,1)$. This is what I have so far: $$L = x_1^ax_2^{1-a} - \lambda(p_1x_1 + p_2x_2 - ...
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2answers
72 views

Applications of information theory in economics?

What are some direct applications of information theory in economics theory and/or finance? Any relevant articles, surveys, or book references are appreciated (especially if they are targeted to ...
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0answers
9 views

Calculating the conversion factor for a bond

It is june 25 2005. The futures price for the June 2005 CBOT bond futures contract is 118-23. Calculate the conversion factor for a bond maturing on Jan. 1, 2021, paying a coupon of 10% : since the ...
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1answer
240 views

Does one necessarily need an MS in Math before taking a PhD in Math? [closed]

I finished bachelor's in mathematical finance and am nearly finished with master's in mathematical finance (I am already done with thesis), and I plan to pursue a PhD not in mathematical finance but ...
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0answers
351 views

Can I get a PhD in Stochastic Analysis given this limited background?

General advice on PhD apps welcome Given my limited background in stochastic analysis and other information (below), can I apply for a PhD with stochastic analysis for my dissertation topic? 1/4 I ...
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0answers
24 views

Quasiconcavity of $g(x)=xf(K-x)$

The function $f(x)$ is strictly increasing, finite, positive and twice continuously differentiable on the compact interval $[0,K]$, and $f(0)=0$. I'm trying to either find a counterexample to, or a ...
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0answers
26 views

Asymmetric information about company's worth, maximizing profit

ABC Ltd is worth $v$ to its owners who will sell if they get an offer at least $v$. XYZ Ltd doesn't know $v$ but knows that $v$ can be $2m$, $3m$, $4m$, or $6m$ and considers these $4$ outcomes are ...
3
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1answer
34 views

Core vs. Strong Core in Housing Allocation Games

I am presently reviewing the course notes for my Game Theory course, and I'm struggling with the concepts of the core vs. the strong core. In the notes, we have three players, with preferences ...
7
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1answer
3k views

Understanding the Leontief inverse

What I remember from economics about input/output analysis is that it basically analyses the interdependencies between business sectors and demand. If we use matrices we have $A$ as the input-output ...
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1answer
44 views

Mathematical question about currencies

I've tried to get an answer for this question elsewhere but with no luck, so I would appreciate a mathematical analysis of it. Assume $0\%$ commission. Consider three currencies, let's say the Zong, ...
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1answer
22k views

Deriving demand functions given utility

A consumer purchases food $X$ and clothing $Y$. Her utility function is given by: $U(X,Y) = XY +10Y$, income is $\$100$ the price of food is $\$1$ and the price of clothing is $P_y$. Derive the ...
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0answers
27 views

Average Cost of Obtaining in game Item

I know this will sound like a trivial maths problem, but recently I've been playing a game in which you can pay 5 in game gems to get a Rare (R), Super Rare (SR), and Ultra Rare (UR) characters ...
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0answers
8 views

Endogenous covariate in first-difference panel data model

I have a linear panel data set (murder.dta, standard STATA dataset). First I estimate a first difference model. An assumption from this model is that the first differences of the covariates and the ...
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0answers
16 views

How to find the equilibrium quantity?

what is the equilibrium quantity if the supply curve is given by Q=P-20 Also, How do I derive the demand curve from this supply curve where the quantity is 900 and the price is 300 on the curve
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0answers
38 views

Personal Experiences with Probability Simulation

Simulations methods are increasingly used in theoretical and (especially) applied probability. Personally, I have used simulation for purposes that range from recreational Q&A to applications of ...
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0answers
27 views

When the company will stop production?

Given total costs function $C(q)=100+10q-6q^2+3q^3$. For which price the company will stop production given that all of the fixed costs are sunk? Do not know how to approach those type of questions, ...
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0answers
11 views

Assistance with exponential inflation equations

We are trying to model an exponentially inflationary currency exchange, let's say converting dollars into clams, based on a compounding rate. Our cost equation looks like this: c = b(b*r)^e Where: c ...
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0answers
55 views

Finding the equilibrium quantity of goods produced

Consider a market with 3 types of goods, $a$, $b$ and $m$. There are two types of consumers: 100 consumers of type X and 100 consumers of type Y. All consumers of the same type are identical to each ...
3
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1answer
74 views

Given domain and range of a monotone function, what is the maximum slope?

I'm looking for a reference in answer to one of the following questions: Is there a general result out there that will give the maximum possible slope of a monotone function, given its domain and ...
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1answer
494 views

How to show that Roy's identity holds in the case of a monotonic increasing transformation?

I know that by Roy's identity, the Marshallian demand for a good (i) is $x^*_i = -\frac{V_i}{V_y}$, where $V(Y,P)$ is the indirect utility function, $V_i=\frac{\partial V}{\partial P_i}$, and ...
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0answers
25 views

How to calculate the max home purchase price based on a maximum Debt to Income ratio?

I'm trying to calculate the maximum home purchase price a home buyer can afford given their annual salary, monthly debt, and a maximum debt to income ratio of 44%. I am not super familiar with ...
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1answer
34 views

Stochastic dominance characterization

Consider two probability measures on $\Bbb R$ given by $\mu$ and $\nu$. We write $\mu\leq \nu$ if there exists a joint distribution $P$ with the latter marginals such that $P(x\leq y) = 1$. In ...
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0answers
62 views

Utility maximization of n goods

I have a question that involves finding the optimal demand of n goods for a consumer. However, I haven't anything like this before and I'm not sure how to proceed. The consumer has a utility ...
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0answers
45 views

How to calculate $p_i$ in Blau's Index of Heterogeneity

I came across this: "Therefore, board gender diversity and board racial diversity are calculated using Blau's index of heterogeneity $(1 - \sum p_{i}^2)$, where $p_i$ is the proportion of group ...
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0answers
24 views

From utility function (3 products) to demand function (2 products)

I am struggling with this exercise and would appreciate some help. Consider two goods and a representative consumer whose utility is given by: $U(q_{0}, q_{1}, q_{2})= ...
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2answers
44 views

dynamical systems applied to economics

I'm ending my undergraduate economics course and I'd like to extend my MA research program to dynamical economic systems. Knowing that my mathematical basis is calculus of 1 and 2 variables, linear ...
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1answer
51 views

Optimization of utility function with Lagrange multiplier

Let u: ${\mathbf R^n_+ \rightarrow \mathbf R}$ be a utility function of n goods which you buy in quantities $x_1,…,x_n$ to the prices $p_1,…,p_n$ under the budget K. So maximize $u(x_1,…,x_n)$ subject ...
2
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1answer
122 views

proof using (fixed point theorem)

I am seeking to solve for a Nash equilibrium in pure strategies $(d_2,d_2)$ involving two players, $1$ and $2$. Given that $h'(.)$ is s strictly decreasing and continuous function, $\Phi(d_1-d_2)$ ...
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1answer
27 views

micro economics [closed]

If production function is linear and given by: $Y=3K +L$ Find the marginal rate of technical substitution. If price of capital equals the price of labour what is the best combination of capital ...
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0answers
34 views

how to solve a simplex with n variables

I don't know how to resolve a simplex with n variables I have this primal problem \begin{cases} \text{min}& z=-x_1 - x_2 -... - x_n\\ &a_1x_1 + a_2x_2 +... + a_nx_n \le 1\\ &x_1... ...
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1answer
18 views

I need som help with price ratios.

Okay, so I'm doing some econ. homework and I'm supposed to draw a graph where the relative price of $P$ is $4 T/P$. Thing is that my brain stops working anytime I try to think about ratios. I know ...
2
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2answers
212 views

No theft model of corruption

Consider the model of corruption explored by Shleifer and Vishni’s where there is one government-produced good $X$. There is a demand for that good described by the inverse demand equation $$Q_d = 10 ...
3
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1answer
89 views

Reference Request - Introductory book on Mathematical Modelling in Economics and Business

I have to take a compulsory course named Mathematical Modelling in Economics and Business this semester and have absolutely no background on the subject. I also noticed there is no post on this site ...
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0answers
9 views

Engel Curve in Economics

I have a utility function in the form $U = B^{.67}Z^{.33}$ I am supposed to find an Engel curve assuming that the price of goods B and Z are $P_b$ and $P_z$ respectively with income level $Y$. I can ...
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0answers
13 views

Density - Excess Bunching - Bunching Estimator

Saez defines excess bunching at the kink as the area under the density in the dominated region: $$ B = \int^{z^*+d z}_{z^*} h(z)dz \approx h(z^*)dz^* $$ where income $z$ is distributed according to a ...
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1answer
21 views

About uniqueness of interest yield

I am not sure this belong to this site, in case I will post it elsewhere. Let $P$ be the price of a bond, let $C_k$ the promised cash flow in year $k$. Then we define the interest yield $y$ as the ...
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1answer
350 views

Equilibrium existence proof

Problem: Let $J$ be an integer and let $I$ be an integer multiple of $J$. Let ${\cal I}= \lbrace 1,2,\ldots, I\rbrace$ and ${\cal J}= \lbrace 1,2,\ldots, J\rbrace$. The set $X_{I,J}$ of all ...
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0answers
27 views

Convolution of which distribution will give a uniform distribution?

Suppose there are two IID random variables x1 and x2. What should be the distribution of these random variables so that the distribution of x1-x2 is a uniform distribution?