Practice Exercises for Intermediate Microeconomic Theory

Title Page
Copyright
Contents
Preface
Chapter 2 - Consumer Preferences and Utility
	2.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #2.1
		Self-assessment exercise #2.2
		Self-assessment exercise #2.3
		Self-assessment exercise #2.4
		Self-assessment exercise #2.5
		Self-assessment exercise #2.6
		Self-assessment exercise #2.7
		Self-assessment exercise #2.8
		Self-assessment exercise #2.9
		Self-assessment exercise #2.10
		Self-assessment exercise #2.11
		Self-assessment exercise #2.12
		Self-assessment exercise #2.13
		Self-assessment exercise #2.14
		Self-assessment exercise #2.15
	2.2 Solutions to End-of-Chapter Exercises
		Exercise #2.1 - Indifference Curves B
		Exercise #2.3 - One Way or Another B
		Exercise #2.5 - Cobb-Douglas A
		Exercise #2.7 - Perfect Substitutes A
		Exercise #2.9 - Increasing Transformations B
		Exercise #2.11 - Finding Properties–II C
		Exercise #2.13 - Finding Properties–IV B
		Exercise #2.15 - Guilty Preferences B
		Exercise #2.17 - Protein Preferences A
		Exercise #2.19 - Eating Pizza A
Chapter 3 - Consumer Choice
	3.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #3.1
		Self-assessment exercise #3.2
		Self-assessment exercise #3.3
		Self-assessment exercise #3.4
		Self-assessment exercise #3.5
		Self-assessment exercise #3.6
		Self-assessment exercise #3.7
		Self-assessment exercise #3.8
		Self-assessment exercise #3.9
		Self-assessment exercise #3.10
	3.2 Solutions to End-of-Chapter Exercises
		Exercise #3.1 - Budget Line A
		Exercise #3.3 - Composite Good A
		Exercise #3.5 - Expenditure Function A
		Exercise #3.7 - Cobb-Douglas–I A
		Exercise #3.9 - Cobb-Douglas–III C
		Exercise #3.11 - Different Relationships C
		Exercise #3.13 - Perfect Complements–I A
		Exercise #3.15 - Expenditure Minimization Problem A
		Exercise #3.17 - Perfect Complements–II B
		Exercise #3.19 - Utility Maximization B
Chapter 4 - Substitution and Income Effects
	4.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #4.1
		Self-assessment exercise #4.2
		Self-assessment exercise #4.3
		Self-assessment exercise #4.4
		Self-assessment exercise #4.5
		Self-assessment exercise #4.6
		Self-assessment exercise #4.7
		Self-assessment exercise #4.8
		Self-assessment exercise #4.9
	4.2 Solutions to End-of-Chapter Exercises
		Exercise #4.1 - Deriving Functions–I A
		Exercise #4.3 - Quasilinear Utility–I B
		Exercise #4.5 - Decomposition Bundles B
		Exercise #4.7 - Income Effects A
		Exercise #4.9 - Linear Demand A
		Exercise #4.11 - Income Elasticity–I B
		Exercise #4.13 - Perfect Complements B
		Exercise #4.15 - Deriving Functions–II A
		Exercise #4.17 - Income Elasticity–II A
		Exercise #4.19 - Giffen Good? B
Chapter 5 - Measuring Welfare Changes
	5.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #5.1
		Self-assessment exercise #5.2
		Self-assessment exercise #5.3
		Self-assessment exercise #5.4
		Self-assessment exercise #5.5
		Self-assessment exercise #5.6
		Self-assessment exercise #5.7
	5.2 Solutions to End-of-Chapter Exercises
		Exercise #5.1 - Changes in CS A
		Exercise #5.3 - CS and Changing Prices A
		Exercise #5.5 - CS and Nonlinear Demand–I A
		Exercise #5.7 - Calculating CV B
		Exercise #5.9 - CV with Cobb-Douglas Utility Function B
		Exercise #5.11 - CV with General Price Change C
		Exercise #5.13 - EV with Cobb-Douglas Demand–II B
		Exercise #5.15 - EV with Different Income A
		Exercise #5.17 - CS, CV, and EV with No Income Effects–I B
		Exercise #5.19 - Alternative Representation of CV B
		Exercise #5.21 - Alternative Representation of EV B
Chapter 6 - Choice under Uncertainty
	6.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #6.1
		Self-assessment exercise #6.2
		Self-assessment exercise #6.3
		Self-assessment exercise #6.4
		Self-assessment exercise #6.5
		Self-assessment exercise #6.6
		Self-assessment exercise #6.7
		Self-assessment exercise #6.8
	6.2 Solutions to End-of-Chapter Exercises
		Exercise #6.1 - Expected Utility A
		Exercise #6.3 - EV and Variance–II B
		Exercise #6.5 - Expected Utility–II A
		Exercise #6.7 - Risk Aversion B
		Exercise #6.9 - Risk Loving B
		Exercise #6.11 - Risk Neutrality B
		Exercise #6.13 - Contracting an Illness B
		Exercise #6.15 - Not Purchasing Full Insurance B
		Exercise #6.17 - Arrow-Pratt Coefficient–II B
		Exercise #6.19 - Prospect Theory–I B
		Exercise #6.21 - Gambling A
Chapter 7 - Production Functions
	7.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #7.1
		Self-assessment exercise #7.2
		Self-assessment exercise #7.3
		Self-assessment exercise #7.4
		Self-assessment exercise #7.5
		Self-assessment exercise #7.6
		Self-assessment exercise #7.7
		Self-assessment exercise #7.8
		Self-assessment exercise #7.9
		Self-assessment exercise #7.10
		Self-assessment exercise #7.11
		Self-assessment exercise #7.12
		Self-assessment exercise #7.13
	7.2 Solutions to End-of-Chapter Exercises
		Exercise #7.1 - Properties of Production Functions B
		Exercise #7.3 - Where the MP and AP Curves Cross A
		Exercise #7.5 - MP and Changing Capital B
		Exercise #7.7 - Linear Production and MRTS A
		Exercise #7.9 - Returns to Scale–I A
		Exercise #7.11 - Decreasing Marginal Returns A
		Exercise #7.13 - Choosing Production A
		Exercise #7.15 - CES Production Function and Marginal Products B
		Exercise #7.17 - Choosing Factors of Production B
		Exercise #7.19 - Comparing MRTS C
Chapter 8 - Cost Minimization
	8.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #8.1
		Self-assessment exercise #8.2
		Self-assessment exercise #8.3
		Self-assessment exercise #8.4
		Self-assessment exercise #8.5
		Self-assessment exercise #8.6
		Self-assessment exercise #8.7
		Self-assessment exercise #8.8
		Self-assessment exercise #8.9
		Self-assessment exercise #8.10
		Self-assessment exercise #8.11
		Self-assessment exercise #8.12
		Self-assessment exercise #8.13
	8.2 Solutions to End-of-Chapter Exercises
		Exercise #8.1 - Cost Minimization for Cobb-Douglas B
		Exercise #8.3 - Properties of a Cost Function B
		Exercise #8.5 - CMP for Cobb-Douglas Production–I C
		Exercise #8.7 - Explicit and Implicit Costs A
		Exercise #8.9 - CMP with Cobb-Douglas Production–II B
		Exercise #8.11 - Cobb-Douglas Production and Input Demand B
		Exercise #8.13 - Short-Run Cobb-Douglas Costs B
		Exercise #8.15 - Substitutes in Production B
		Exercise #8.17 - Economies of Scale–I A
		Exercise #8.19 - Economies of Scope A
		Exercise #8.21 - Experience Elasticity–II A
Chapter 9 - Partial and General Equilibrium
	9.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #9.1
		Self-assessment exercise #9.2
		Self-assessment exercise #9.3
		Self-assessment exercise #9.4
		Self-assessment exercise #9.5
		Self-assessment exercise #9.6
		Self-assessment exercise #9.7
		Self-assessment exercise #9.8
		Self-assessment exercise #9.9
		Self-assessment exercise #9.10
	9.2 Solutions to End-of-Chapter Exercises
		Exercise #9.1 - Identifying Perfectly Competitive Markets A
		Exercise #9.3 - Long-Run Equilibrium and Subsidies B
		Exercise #9.5 - Perfectly Competitive Equilibrium–II A
		Exercise #9.7 - Shutdown Price and Short-Run Supply A
		Exercise #9.9 - Finding Aggregate Supply and Equilibrium A
		Exercise #9.11 - Calculating Producer Surplus A
		Exercise #9.13 - Pro.t versus Producer Surplus B
		Exercise #9.15 - General Equilibrium–I B
		Exercise #9.17 - Efficiency in General Equilibrium B
		Exercise #9.19 - Second Welfare Theorem C
		Exercise #9.21 - First Welfare Theorem with External Effects C
Chapter 10 - Monopoly
	10.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #10.1
		Self-assessment exercise #10.2
		Self-assessment exercise #10.3
		Self-assessment exercise #10.4
		Self-assessment exercise #10.5
		Self-assessment exercise #10.6
		Self-assessment exercise #10.7
		Self-assessment exercise #10.8
		Self-assessment exercise #10.9
		Self-assessment exercise #10.10
	10.2 Solutions to End-of-Chapter Exercises
		Exercise #10.1 - Monopoly Equilibrium-Linear Costs B
		Exercise #10.3 - Maximizing Revenue versus Profit A
		Exercise #10.5 - Regulating a Natural Monopoly B
		Exercise #10.7 - Two Parts of Marginal Revenue A
		Exercise #10.9 - Factors of a High Monopoly Price B
		Exercise #10.11 - Monopoly with General Linear Demand C
		Exercise #10.13 - Multiplant Monopoly–I B
		Exercise #10.15 - Multiproduct Monopoly C
		Exercise #10.17 - Advertising-to-Sales Ratio A
		Exercise #10.19 - Identify a Monopsony A
		Exercise #10.21 - Monopsony–Two Inputs B
Chapter 11 - Price Discrimination and Bundling
	11.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #11.1
		Self-assessment exercise #11.2
		Self-assessment exercise #11.3
		Self-assessment exercise #11.4
	11.2 Solutions to End-of-Chapter Exercises
		Exercise #11.1 - Price Discrimination with Different Demands B
		Exercise #11.3 - Implementing Price Discrimination A
		Exercise #11.5 - When to Price Discriminate B
		Exercise #11.7 - Willingness to Price Discriminate B
		Exercise #11.9 - Deciding When to Withdraw from a Market B
		Exercise #11.11 - Second-Degree Price Discrimination A
		Exercise #11.13 - Second-Degree Price Discrimination with Three Blocks C
		Exercise #11.15 - Bundling Prices A
		Exercise #11.17 - Bundling-II B
		Exercise #11.19 - Bundling-III B
Chapter 12 - Simultaneous-Move Games
	12.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #12.1
		Self-assessment exercise #12.2
		Self-assessment exercise #12.3
		Self-assessment exercise #12.4
		Self-assessment exercise #12.5
		Self-assessment exercise #12.6
		Self-assessment exercise #12.7
		Self-assessment exercise #12.8
		Self-assessment exercise #12.9
		Self-assessment exercise #12.10
	12.2 Solutions to End-of-Chapter Exercises
		Exercise #12.1 - Strict Dominance A
		Exercise #12.3 - Strict Dominance – Some Bite B
		Exercise #12.5 - Prisoner’s Dilemma B
		Exercise #12.7 - Weak Dominance A
		Exercise #12.9 - Weak Dominance–III B
		Exercise #12.11 - Nash Equilibrium in a 3x3 Matrix B
		Exercise #12.13 - Nash Equilibrium in the Split–Steal Game B
		Exercise #12.15 - Rock, Paper, Scissors–I A
		Exercise #12.17 - Charitable Contributions B
		Exercise #12.19 - Finding msNE–Coordination Game B
		Exercise #12.21 - Penalty Kicks A
Chapter 13 - Sequential and Repeated Games
	13.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #13.1
		Self-assessment exercise #13.2
		Self-assessment exercise #13.3
		Self-assessment exercise #13.4
	13.2 Solutions to End-of-Chapter Exercises
		Exercise #13.1 - Backward Induction–I A
		Exercise #13.3 - Backward Induction–III B
		Exercise #13.5 - Backward Induction–V B
		Exercise #13.7 - Battle of the Sexes Game A
		Exercise #13.9 - Anticoordination Game A
		Exercise #13.11 - Complementary Pricing B
		Exercise #13.13 - Centipede Game C
		Exercise #13.15 - Repeated Dilemmas B
		Exercise #13.17 - Alternative Triggers B
		Exercise #13.19 - Temporary Punishments C
		Exercise #13.21 - Punishment Size B
		Exercise #13.23 - Rock, Paper, Scissors–II B
Chapter 14 - Imperfect Competition
	14.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #14.1
		Self-assessment exercise #14.2
		Self-assessment exercise #14.3
		Self-assessment exercise #14.4
		Self-assessment exercise #14.5
		Self-assessment exercise #14.6
		Self-assessment exercise #14.7
		Self-assessment exercise #14.8
		Self-assessment exercise #14.9
	14.2 Solutions to End-of-Chapter Exercises
		Exercise #14.1 - Her.ndahl-Hirschman Index A
		Exercise #14.3 - Properties of the Best Response Function B
		Exercise #14.5 - Symmetric Cournot A
		Exercise #14.7 - Cournot with Asymmetric Fixed Costs B
		Exercise #14.9 - Cournot with Three Firms C
		Exercise #14.11 - Finitely Repeated Grim-Trigger Strategy B
		Exercise #14.13 - Collusion with Delayed Detection B
		Exercise #14.15 - Colluding Barbecue B
		Exercise #14.17 - Properties of the Stackelberg Equilibrium A
		Exercise #14.19 - Cournot versus Stackelberg B
		Exercise #14.21 - Product Differentiation A
		Exercise #14.23 - Stackelberg Prices with Homogeneous Goods A
		Exercise #14.25 - Reconciling Bertrand and Cournot through Capacity C
Chapter 15 - Games of Incomplete Information and Auctions
	15.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #15.1
		Self-assessment exercise #15.2
		Self-assessment exercise #15.3
		Self-assessment exercise #15.4
		Self-assessment exercise #15.5
	15.2 Solutions to End-of-Chapter Exercises
		Exercise #15.1 - Pareto Uncertainty–I A
		Exercise #15.3 - Stackelberg Leader Facing Uncertain Costs A
		Exercise #15.5 - Uncertain Demand.One Uninformed Firm B
		Exercise #15.7 - Entry Deterrence B
		Exercise #15.9 - First-Price Auction–II A
		Exercise #15.11 - Risk Aversion–I B
		Exercise #15.13 - Second-Price Auction–I A
		Exercise #15.15 - Lottery Allocation–I B
		Exercise #15.17 - All-Pay Auction C
		Exercise #15.19 - Efficiency with Risk Aversion B
		Exercise #15.21 - Comparing Auctions A
Chapter 16 - Contract Theory
	16.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #16.1
		Self-assessment exercise #16.2
		Self-assessment exercise #16.3
		Self-assessment exercise #16.4
		Self-assessment exercise #16.5
		Self-assessment exercise #16.6
	16.2 Solutions to End-of-Chapter Exercises
		Exercise #16.1 - Moral Hazard A
		Exercise #16.3 - Risk Aversion–II A
		Exercise #16.5 - Household Chores–I B
		Exercise #16.7 - Basketball–I A
		Exercise #16.9 - Insurance Market–I B
		Exercise #16.11 - Risk-Averse Lemons–I B
		Exercise #16.13 - Risk-Averse Lemons–II B
		Exercise #16.15 - Risk Neutrality–II B
		Exercise #16.17 - Risk Neutrality–II B
		Exercise #16.19 - Training A
		Exercise #16.21 - Adverse Selection A
Chapter 17 - Externalities and Public Goods
	17.1 Solutions to Self-Assessment Exercises
		Self-assessment exercise #17.1
		Self-assessment exercise #17.2
		Self-assessment exercise #17.3
		Self-assessment exercise #17.4
		Self-assessment exercise #17.5
		Self-assessment exercise #17.6
		Self-assessment exercise #17.7
	17.2 Solutions to End-of-Chapter Exercises
		Exercise #17.1 - Regulated Duopoly B
		Exercise #17.3 - Positive Externalities and Social Optimum A
		Exercise #17.5 - Optimal Emission Fee B
		Exercise #17.7 - Public Goods and Free-Riding B
		Exercise #17.9 - Common-Pool Resource–I B
		Exercise #17.11 - Common-Pool Resource–III B
		Exercise #17.13 - When Does the Coase Theorem Apply? A
		Exercise #17.15 - Coase Theorem in Action A
		Exercise #17.17 - Multiple Polluters B
		Exercise #17.19 - Common-Pool Refrigerator A