Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 1, Problem 5P
(a)
To determine
All agents are not optimized in the given scenario.
(b)
To determine
Results of being in equilibrium.
(c)
To determine
Shopper with most informative behavior.
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You have 6 hours to study for 2 exams tomorrow. The relationship between the time studying and test scores is shown below.
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Psychology
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58
64
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66
1
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73
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79
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a. Use the rule for determining optimal purchases to decide how many hours you should study each subject Treat each point on an exam like 1 unit of utility and
assume you are equally interested in doing well in economics and psychology.
You should study economics for 6 hours and psychology for 5 hours.
You have 6 hours to study for 2 exams tomorrow. The relationship between the time studying and test scores is shown below.
Economics
Psychology
Score
Hours
Score
Hours
58
58
66
1
64
2
73
2
69
3
79
3
73
84
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a. Use the rule for determining optimal purchases
decide how many hours you should study each subject. Treat each point on an exam like 1 unit of utility and assume you
equally interested in doing well in economics and psychology.
You should study economics for hours and psychology for hours.
a) Prove that when the consumer is in equilibrium the marginal utility that is placed on the goods he/she consumes is equal to its price. Explain how the consumer can restore equilibrium if market condition changes.
Chapter 1 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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