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Show that an anonymous social welfare function must have indifference curves that are symmetric about the 45° line.
What do these indifference curves imply about the degree of concern for equity of the social planner? Repeat for the welfare function W = min {U1; U2}.
Should a social planner be concerned with the distribution of income or the distribution of utility? How does the answer relate to needs and abilities?
What is the likely outcome of such a situation? Where will the process stop? Could each of them spend more than the value of the rent? Why or why not?
The government will choose the applicant that spends the most money lobbying. If the applicants cannot collude, how much will each spend on lobbying?
Your expected profit from bidding B is [200 - B] x Probability of winning. Show that the profit-maximizing strategy consists of bidding half your valuation.
Construct a variation of the rent-seeking game without the discontinuity in winning/ losing. Find the pure strategy equilibrium.
An industry is known to face market price elasticity of demand e =-3. What would the Lerner index be at the Cournot equilibrium in this industry?
Education is often viewed as a good with positive externalities. Explain how education might produce positive external effects.
Apply the Cease theorem to explain how costless bargaining will lead to a socially ancient outcome, no matter to whom property rights are assigned.
If the government decides to distribute the permits, does the allocation of permits among firms matter for economic eminency?
How much of the chemical should the market supply at the social optimum? How large is the deadweight loss from the externality?
Construct a tax-subsidy revelation scheme such that it is a dominant strategy for each party to report truthfully their private information.
Plot the curves of the commuting time by car and the commuting time by train as a function of the proportion of car users.
When the monopolist operates on the inelastic part of the demand curve, it can increase profit by producing less.
What gives the government the power to regulate mergers between firms? From the view point of the welfare to society.
What are the two problems that arise when the government regulates a natural monopoly by limiting price to be equal to marginal cost?
What is the difference between vertical and horizontal product differentiation? Provide an example of each.
At the symmetric equilibrium, what are the industry output and price levels? What are the equilibrium per firm output and profit levels?
Find a firm's best-response function, the Cournot equilibrium output, price, and profit. What type of equilibrium is this?
Find the Cournot equilibrium output and profit. How many firms (as a function of K) can survive at the equilibrium?
What is a monopoly? What has the government done to prevent monopolies? Should the government regulate monopolies more? Why or why not?
Find the Cournot equilibrium output and profit. Give a precise economic intuition explaining your answer relative to the usual (linear cost) case.
List all conditions on the primitives of the model such that each firm is better o¤ after these mergers. Explain your answer (no proof needed).
Discuss how brand promotion can increase ineciency. Is brand proliferation good or bad?