×

### Let's log you in.

or

Don't have a StudySoup account? Create one here!

×

or

## MICROECON THEORY

by: Arno Leuschke

16

0

15

# MICROECON THEORY ECON 100A

Arno Leuschke
UCSB
GPA 3.66

Staff

These notes were just uploaded, and will be ready to view shortly.

Either way, we'll remind you when they're ready :)

Get a free preview of these Notes, just enter your email below.

×
Unlock Preview

COURSE
PROF.
Staff
TYPE
Class Notes
PAGES
15
WORDS
KARMA
25 ?

## Popular in Economcs

This 15 page Class Notes was uploaded by Arno Leuschke on Thursday October 22, 2015. The Class Notes belongs to ECON 100A at University of California Santa Barbara taught by Staff in Fall. Since its upload, it has received 16 views. For similar materials see /class/227160/econ-100a-university-of-california-santa-barbara in Economcs at University of California Santa Barbara.

×

## Reviews for MICROECON THEORY

×

×

### What is Karma?

#### You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 10/22/15
gamma Sum mg 23de Wnei fam Magrsunmamamit gammy ML mm Martha D l 7 l d Emma 15 m ie Huulraiu m Jnn39ipurili xe Outline o Welfare measures example 0 Welfare effects of interference in competitive markets 0 Market Demand Chapter 14 o Deriving market demand from individual demands a How responsive is qd to a change in price elasticity a What is the relationship between revenue and demand elasticity amiie it glrale in immune Mailer CV amp EV Example Consider a utility function Uc17 Cg 6162 original prices p1 pg 1 and income In 100 Find CV EV when p1 increases to p 1 2 0 Need to find consumption utility before and after Do this by deriving a demand function for each good Solve max 6 6 61m 1 2 subject to p161 i p262 m 0 MRS priceratio MU2 C1 P2 7gt 161 262 MU1 62 P1 p p 0 Substituting back into the budget constraint give us 1 and 2 2P2 2P1 gmme Mimi in minimum Marier CV amp EV Example Consumption amp Utility under before and after the price change 0 pl 1 pg 1 m 100 before 0 c150cz o U50502500 o p 1 2 p 2 1 m 100 after a c253nd c 50 a U25501250 CV the amount of extra money needed to bring the budget line back up to the old indifference curve As WEH an as befure mus CV amp EV Example Compensating Variation 0 How much money to we have to pay the consumer to make her as well off as she was before U 2500 o If income is m then consumption with the new prices is m m 1 2p1 4 m m quot 2 27 7 and utility is U cfc m 0 For what value of m is U U 25007 m 2500 m 50x z 141 So CVm7mz4l Vi Eharmig is m Jnn39uiurill m Equivalent Variation EV how much money we would have to take away from the consumer before the price change to leave herjust as well off as she would be after c2 As Well arr as after CV amp EV Example Equivalent Variation 9 lfwe don39t change the prices how much money would we have to take away from the consumer to bring her utility down an equivalent amount 0 At original prices consumption with income m is 1 2 m7 and utility is then U cfc quot12 0 For what value of m is U U 12507 m Tl250gtm50 z71 SoEVm7mz29 Welfare in Competitive Markets 0 Q How can we measure the gain or loss caused by market interventionregulation o A Use consumer and producer surplus total surplus C5 PS 0 Our benchmark will be competitive free market equilibrium F39HEE Snuggly blankets Welfare in Competitive Markets Any regulation that causes the units from ql to qo to be not traded destroys some of the gains from trade Price This loss is the net cost of regulation Welfare in Competitive Markets Example per unit tax of t Price Welfare in Competitive Markets Example price floor pf Price Welfare in Competitive Markets Example price ceiling pc Price Welfare in Competitive Markets Example rationing only ql units allowed to be traded Price mim m CanwriM Je new Maria Demand From Individual Demands to Market Demand Let Dp be the demand function of person i and suppose that mp max20 a p70 Dgp max1072p0 Price Price 0101 5 17201 20 Cats 10 Cats Demand of Agent 1 Demand of Agent 2

×

×

### BOOM! Enjoy Your Free Notes!

×

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

## Why people love StudySoup

Jim McGreen Ohio University

#### "Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Jennifer McGill UCSF Med School

#### "Selling my MCAT study guides and notes has been a great source of side revenue while I'm in school. Some months I'm making over \$500! Plus, it makes me happy knowing that I'm helping future med students with their MCAT."

Steve Martinelli UC Los Angeles

#### "There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Parker Thompson 500 Startups

#### "It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!
×

### Refund Policy

#### STUDYSOUP CANCELLATION POLICY

All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email support@studysoup.com

#### STUDYSOUP REFUND POLICY

StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here: support@studysoup.com

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to support@studysoup.com