# 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.

1,540 questions
Filter by
Sorted by
Tagged with
14 views

### Stochastic differential equations in economathematics [closed]

Prove that the stock price, governed by the binomial tree, converges to the stock prices of black scholes model. What kind of assumptions should be made? Are they unique? ...
18 views

### The Method of Quantiles

I am reading a book about quantile regression and at some point, they come to the method of quantiles, which is pretty much like the beloved method of moments. The case is that I do not understand the ...
43 views

### How to solve this post? [closed]

How long does it take to download a two-hour HD movie from the iTunes store? According to Apple’s technical support site, support.apple.com/en-us/HT201587, downloading such a movie using a 15 Mbit/s ...
1 vote
21 views

### Using Beta distribution in a profit maximization problem - replacing e in a system of equations that we'd already solved

I'm working on an economic model that we've already solved using 1-e^(-Investment) as the probability of a stochastic process. Doing this we get lovely, simple derivatives for our decision rules (ex. ...
38 views

### Help understanding notation used in a problem

Can someone help me understand the notation used here? I can't seem to figure out the meaning behind what comes after the "if condition". If Adeline chooses $T$ U_i=v\min\{...
1 vote
113 views

### Economics maximization problem linear activity

Consider the vectors: $a_1 = \begin{pmatrix} 0 \\ -1 \\ 1 \\0 \end{pmatrix}, a_2 = \begin{pmatrix} 0 \\ 0 \\ -1 \\1 \end{pmatrix}, a_3 = \begin{pmatrix} 2 \\ 0 \\ 0 \\ 1\end{pmatrix}$ Find a single ...
15 views

### How to measure the affection of 2 variables on time dimension?

As the title, if in case you have 2 time series sequences A = $[a_{t}, a_{t-1},..., a_{t-n}]$ and B = $[b_{t}, b_{t-1},..., b_{t-n}]$, given $m$ steps back to history $(m<n)$ and assume we have ...
28 views

### Are there interior solutions to this constrained optimization problem?

I am getting some confusing results solving this problem: $$\max_{c_0\geq 0, c_1\geq 0} \ R(1-c_0) [p t_1 + (1-p) c_1^{-\lambda} t_2] \\ s.t. \ c_0+c_1 \leq 1$$ where $\lambda>1$, $R>0$, $p$ is ...
22 views

### Proving hemicontinuity.

In my Mathematics for Economics course, we have started studying hemicontinuity. The concept is very clear to me, the problem is that I cannot understand how to prove it. Here is an example, from the ...
23 views

### Utility in case one good is Bad and other is Good

I have a question Suppose there are $2$ goods, $X$ and $Y$ where, $X$ is Good good, $Y$ is Bad good Now Can the Utility be 1.) $U = x-y$ 2.) $U = \frac{x}{y}$ 3.) $U = \frac{\ln x}{y}$ They all are ...
176 views

### How does the Pareto distribution represent the 80-20 rule?

According to the current Wikipedia article: The Pareto principle or "80-20 rule" stating that 80% of outcomes are due to 20% of causes was named in honour of Pareto, but the concepts are ...
23 views

### Finding the growth rate of a variable $Y=4K^{2/3}N^{1/3}$ with respect to $K$ and $N$ simultaneously. [closed]

I took the natural log on both sides, and have an intuitive sense that I have to differentiate now but I cannot understand how. The question is $Y = 4K^{2/3}N^{1/3}$ and find growth rate of $Y$ ...
1 vote
103 views

### Computing the optimal price from an auction with uniform distributed values

If I sell an item with value uniformly distributed between $0$ and $500$, and I value this item at $200$, then what is the ideal price to try to sell the item for? Note that once I set a price, I ...
224 views

141 views

1 vote
45 views

### 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 ...
21 views

### Distribution of linear combination of normally distributed 2-way censored variable

Consider a censored model with the latent variable given by $$y^*=\beta_0+\beta_1 x+u,$$ and the dependent variable given by  y = \begin{cases} \displaystyle 0, & y^* \le 0 \\ y^*, & 0 < ...
1 vote
54 views

### A Basic Question of Continuous Time Macroeconomic Model (Variation of Constant to Solve an ODE)

I am going through the continuous time macro slides by Ben Moll (link is: https://benjaminmoll.com/wp-content/uploads/2019/07/Lecture2_ECO521.pdf), when deriving New keynesian model in continuous time,...
1 vote
1k views

### Kuhn Tucker condition is sufficient for a global optimum?

$L$ is the variable and $s,r$ are parameters. The question asks to solve $max_{L\geq0}rf(L)-wL$ where $f(L)$ is twice continuously differentiable, strictly increasing and strictly concave. Then how ...
17 views

### Inflation Calculations Skewed by low prices.

I am currently calculating inflation metrics for a retail store. I am simply using their POS data, to calculate the Year-Over-Year price change of each item. I then weight this on the sales, sum it up,...
20 views

### What are some common distributions assumed for approximating a demand curve?

A demand curve is a function $d(p)$ such that at price $p$ the demand for the good is given by $d(p)$. This means that you are making a sales of $p\cdot d(p)$ at price $p$. For typical goods, demand ...
82 views

### Is there any book "economics for mathematicians"? [closed]

If you search economics book there are plenty of them on the market. We may say the say about "mathematics for economists" or "application of mathematics in economics". But I've ...
19 views

### 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 ...
29 views

### 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 ...
39 views

71 views

### 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 ...
685 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 ...
36 views

### Trying to find why solutions to both maximization and minimization problems exist before even solving it [closed]

There is a problem which I have been thinking about but can't come to a conclusion. And Final exam is tomorrow: enter image description here My attempt: To find solutions to both maximization and ...
26 views

### 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....
45 views

### Taylor Expansion for the Return averaged over k periods? [closed]

this is my first question here. I need help to understand the Taylor Expansion which gives the (2.2.5) equation (see the pictures). Thanks (pictures from: Schmidt - Quantitative Finance for Physicists....
1 vote
42 views

### Regression relation to casual relationship

If the correlation coefficient of two variables is 0, can there still be a causal effect between them? And can the causal relationship between these two variables be studied by regression analysis?
29 views