# Questions tagged [economics]

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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### A put option and a call option with identical exercise price are both marketable or neither is.

I am doing Exercise 1.13 in Introduction to Mathematical Finance: Discrete Time Models by Pliska. Exercise 1.13 Suppose the interest rate $r$ is a scalar, and let $c$ and $p$ denote the prices of a ...
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### How do I normalize/standardize a data set to a certain set value (not average, not min, not max)?

I know the formulas for standardizing, normalizing, and mean normalizing (if we take the wikipedia's definition for these terms). What I want to do is to normalize to a set value. For example, if I ...
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### Intuition behind the Compensating Variation!

In Economics, we can calculate the compensating variation (CV), which (to my understanding) is the amount of money we would need to give back to a consumer to keep them at the same level of Utility ...
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### Minimization of the Pollution Problem

I study Economic Analysis.I came accross the following minimization problem I tried to show that M is quasiconcave but i failed. I tried using the definition of quasiconcavity or using the min ...
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### How can elasticity of $f(x)$ be expressed as a percentage change in $f(x)$ per $1$% change in $x$?

In answering the above question, we took the formula of elasticity: $El_xf(x) = (x/f(x))*(∂f(x)/∂x)$ We can transform it in the following way: $El_xf(x) = (∂f(x)/f(x))*(∂x/x)$ Now at this point, the ...
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### 0.35 log points to percentage

What is 0.35 log points in percentages? I have no knowledge of this subject at all. From what I've gathered, it should be Percentage change = (e^log points - 1) * 100, so 42%. Is this correct?
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### Need help identifying what sort of differential equation this is

I'm reading an economics paper, and have stumbled upon this differential equation system: $\dot x = -\beta xy^\alpha$ $\dot y = \beta xy^\alpha - \frac{1}{\sigma}y$ I haven't taken any classes on ...
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### Definition of transition density

Sorry if this is a basic question but I have a hard time grasping the definition of transition density in a financial setting. From what I understand, transition density is the expected (future) value ...
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