marginal utility

Suppose Alice receives 123 utils from consuming one hamburger and 50 utils from consuming a second hamburger. What is the marginal utility of the second hamburger? A) 173 utils B) 73 utils C) 50 utils D) 0 utils

review final for econ 201

review final for economics 201

Microeconomic Theory - lexicographic, cardinal/ordinal utility,envelope, Hotelling's lemma, utility maximization

1. In the context of the usual utility maximization problem involving n(>2) goods, prove that not all goods can be net complements and that at least one good must be normal. 2. Prove the envelope theorem and use it to derive Hotelling's lemma. 3. Explain: (a) Why lexicographic preferences do not yield a continuous utility function. (b) The difference between cardinal and ordinal utility. (c) Why profit maximization is not an assumption in the competitive general equilibrium model. 4. Average costs fall as output increases if and only if the production function is homogeneous of degree p>1. True or false? Explain your answers. 5. Consider the problems of maximizing ut... click for more

Micro

In long- run equilibrium, P=minimum ATC=MC. Of what significance for economic efficiecy is the equality of P and minimum ATC?. The equality of P and MC? Distinguish between productive efficiency and allocative efficiency.

Herfindahl Index on a hypothetical merger

There are 10 auto firms in this problem each showing their market share percentage (US auto industry).The proposed merger involves Ford 22% and BMW 1%. It is noted that Ford includes Mercury, Lincoln, Volvo, Jaguar and BMW includes Mini Cooper.The pre merger index involves all ten firms and equals 1,758 according to my calculations from the formula The Post Merger index invoves the now 9 firms as the result of the merger of Ford and BMW. I added 1% to 22% equaling 23% resulting from the merger and added that to the remaining percentages of each of the other 8 firms.The post merger index equaled 1,802. The guidlines say that the Justice Dept. would oppose a merger that had a pre merger index ... click for more