Practice Exercises for Advanced Microeconomic Theory
by MuñozGarcia
ISBN: 9780262364270  Copyright 2017
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Contents (pg. v)  
Preface (pg. ix)  
Chapter 1  Preferences and Utility (pg. 1)  
Exercise #1  Checking properties of preference relations  I (pg. 1)  
Exercise #3  Monotonicity and strong monotonicity (pg. 15)  
Exercise #5  Convex preferences (pg. 16)  
Exercise #7  Monotonic transformations  I (pg. 17)  
Exercise #9  Lexicographic preference relation (pg. 18)  
Exercise #11  WARP and rationality (pg. 22)  
Exercise #13  Lexicographic preference and WARP (pg. 23)  
Exercise #15  Homogeneity and addition (pg. 24)  
Exercise #17  Quasihyperbolic discounting (pg. 24)  
Chapter 2  Demand Theory (pg. 29)  
Exercise #1  Finding Walrasian demands  I (pg. 29)  
Exercise #3  Finding Walrasian demand for the CES utility function (pg. 35)  
Exercise #5  Checking WARP (pg. 36)  
Exercise #7  WARP for undergrads  II (pg. 41)  
Exercise #9  An introduction to income and substitution effect with a quasilinear utility function (pg. 42)  
Exercise #11  Relationship between WARP and CLD (pg. 45)  
Exercise #13  Quasilinear preferences (pg. 47)  
Exercise #15  CES utility function (pg. 49)  
Exercise #17  Concavity of the support function (pg. 51)  
Exercise #19  Separable utility function (pg. 52)  
Exercise #21  StoneGeary utility function with three goods (pg. 53)  
Exercise #23  Properties of the expenditure function (pg. 55)  
Exercise #25  Duality: equivalence between the UMP and EMP (pg. 57)  
Exercise #27  Compensated (Hicksian) elasticities (pg. 58)  
Chapter 3  Applications of Demand Theory (pg. 61)  
Exercise #1  Taxes versus subsidies (pg. 61)  
Exercise #3  Compensating and equivalent variation (pg. 66)  
Exercise #5  Welfare measures with a quasilinear utility (pg. 70)  
Exercise #7  Consumer theory and welfare (pg. 73)  
Exercise #9  Using the compensating variation to identify price changes (pg. 78)  
Exercise #11  Finding the compensating and equivalent variation with little information (pg. 80)  
Exercise #13  Consumer and producer theory within the household (pg. 81)  
Exercise #15  Aggregation: properties of the social welfare function (pg. 84)  
Exercise #17  Gorman form for vi(piwi) (pg. 87)  
Exercise #19  Aggregate demand (pg. 89)  
Chapter 4  Production Theory (pg. 91)  
Exercise #1  Properties of a standard production function (pg. 91)  
Exercise #3  Increasing average product (pg. 95)  
Exercise #5  Average and marginal product  II (pg. 96)  
Exercise #7  Law of supply (pg. 97)  
Exercise #9  Shephard's lemma (pg. 97)  
Exercise #11  CES production function (pg. 98)  
Exercise #13  Output distribution between two plants (pg. 100)  
Exercise #15  Comparing two technologies (pg. 104)  
Chapter 5  Choice under Uncertainty (pg. 109)  
Exercise #1  Independence axiom (pg. 109)  
Exercise #3  von NeumannMorgenstern utility function (pg. 110)  
Exercise #5  Regret theory (pg. 112)  
Exercise #7  An introductory example on risk aversion (pg. 114)  
Exercise #9  Hyperbolic absolute risk aversion, HARA (pg. 116)  
Exercise #11  Investing in two different assets (pg. 118)  
Exercise #13  Secondorder stochastic dominance (pg. 120)  
Exercise #15  Coecient of risk aversion (pg. 121)  
Exercise #17  Non constant coecient of absolute risk aversion (pg. 121)  
Exercise #19  Coecient of absolute risk aversion and concave transformations (pg. 123)  
Exercise #21  Risk aversion (pg. 124)  
Exercise #23  Uncertainty about the future (pg. 126)  
Exercise #25  Uncertainty in production decisions (pg. 129)  
Chapter 6  Partial and General Equilibrium (pg. 133)  
Exercise #1  Equilibrium number of firms in perfectly competitive markets (pg. 133)  
Exercise #3  Per unit taxes versus ad valorem taxes (pg. 135)  
Exercise #5  Perfect competition with heterogeneous goods (pg. 137)  
Exercise #7  Finding offer curves for different preferences (pg. 138)  
Exercise #9  Pure exchange economy (pg. 140)  
Exercise #11  Gross substitutability and uniqueness of equilibrium (pg. 144)  
Exercise #13  Pareto allocations with externalities (pg. 145)  
Exercise #15  When goods are bads (pg. 147)  
Exercise #17  Excess demand in CobbDouglas preferences (pg. 152)  
Exercise #19  Excess demand functions: homogeneity and Walras' law (pg. 154)  
Exercise #21  Production economy (pg. 156)  
Exercise #23  Pareto and efficient allocations in the household (pg. 160)  
Exercise #25  Effect of distortionary taxes (pg. 165)  
Chapter 7  Monopoly (pg. 171)  
Exercise #1  Monopoly with linear inverse demand (pg. 171)  
Exercise #3  Subsidies to monopolists (pg. 172)  
Exercise #5  Monopoly with durable goods: leasing versus selling (pg. 173)  
Exercise #7  Seconddegree price discrimination (pg. 177)  
Exercise #9  Cost reducing investment (pg. 179)  
Exercise #11  Monopolist with intertemporal network effects (pg. 183)  
Chapter 8  Game Theory and Imperfect Competition (pg. 189)  
Exercise #1  A unique strategy profile that surviving IDSDS must also be NE (pg. 190)  
Exercise #3  Deletion order in IDSDS (pg. 190)  
Exercise #5  Equilibrium predictions from IDSDS versus IDWDS (pg. 191)  
Exercise #7  Four categories of simultaneousmove games (pg. 193)  
Exercise #9  Bayesian Nash equilibrium in the workplace (pg. 196)  
Exercise #11  Cournot with equity swaps (pg. 198)  
Exercise #13  Cournot competition with product differentiation (Deneckere 1983) (pg. 201)  
Exercise #15  Antitrust efforts and collusion (pg. 204)  
Exercise #17  Profitable and unprofitable mergers (pg. 205)  
Exercise #19  Fixed costs and discontinuities (pg. 207)  
Exercise #21  Strategic managerial incentives (pg. 210)  
Exercise #23  Fixed costs with collusion (Bernheim and Whinston 1990) (pg. 213)  
Exercise #25  Cournot game revisited (pg. 214)  
Exercise #27  Collusion with temporary reversion (pg. 216)  
Exercise #29  Impure forms of cooperation (pg. 217)  
Chapter 9  Externalities and Public Goods (pg. 219)  
Exercise #1  Externalities and car accidents (pg. 220)  
Exercise #3  Positive and negative externalities (pg. 224)  
Exercise #5  Regulating externalities under incomplete information (pg. 226)  
Exercise #7  Entry in the commons (pg. 232)  
Exercise #9  Voluntary contributions to a public good with CobbDouglas preferences (pg. 234)  
Exercise #11  Externalities in consumption (pg. 237)  
Exercise #13  Reference points in public good games (pg. 240)  
Exercise #15  Adding regulation to the Salant et al. (1984) model (pg. 242)  
Chapter 10  Contract Theory (pg. 247)  
Exercise #1  Moral hazard (pg. 247)  
Exercise #3  Moral hazardcontinuous probabilities (pg. 252)  
Exercise #5  Moral hazard with two periods (Hopenhayn and Nicolini 1997) (pg. 254)  
Exercise #7  Moral hazard under linear contracts (pg. 257)  
Exercise #9  Moral hazard in teams (Holmstrom 1982) (pg. 260)  
Exercise #11  Solving the lemons problem by offering quality certificates (pg. 263)  
Exercise #13  Principalagent problem (pg. 269)  
Exercise #15  A special type of principalagent problem (pg. 272)  
Exercise #17  Screeningmonopoly pricing (pg. 273)  
Exercise #19  Screening two types of customers (pg. 279)  
Exercise #21  Efficiency wages and the principalagent problem (Shapiro and Stiglitz 1984) (pg. 283)  
References (pg. 285) 
Felix MuñozGarcia
Felix MuñozGarcia is Associate Professor on the School of Economic Sciences at Washington State University.
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