Interesting discussion, worth looking into.

It's an interesting point

this step is critical: we can apply the function referenced in the function argument

Tutorial - try to focus on how we know ther ewill be 2 pure strategies and 1 mixed strategy NE here

Worth covering in tutorial starting from here, focusing on intuition rather than algebra and calculus

Worth covering A-B in tutorial if time permits

This (answer) should say: MR=53-2Q=MC=5... the "-" or dash is confusing here

We know this from the statement

Suppose also that the intended pool is large enough so that whatever number of families come on any day will not affect what people are willing to pay for the pool. (I.e., no congestion)

A student asked

I want to ask why risk-averse has a decreasing marginal utility? Thank you.

Response:

If someone has a decreasing marginal utility of income and they maximise expected utility then they will be risk averse.

This is something that takes a long time to fully explain, and I try to give an explanation in the web-book and in lecture (and again in tomorrow's lecture).

One simple intuition.: Risk averse essentially means "I will never take any fair gamble".

E.g., "I'll never accept a bet with an equal chance of losing or gaining some amount X." How does diminishing MU of income explain this? If I have diminishing MU of income then my utility is increasing in income at a decreasing rate.

The first units of income (e.g., going from 0 income to 15k income) add more utility than the later units of income (e.g., going from 15k income to 30k income) , which adds more than even later increments (e.g., going from 30k to 45k), etc.

So "an equal chance of losing or gaining X" would not be attractive to such a person. Why not? Because relative to any point "losing X" reduces my utility more than "gaining X" increases it.

E.g., in the above example, if you started at 15K income you wouldn't want to have an equal chance of losing or gaining 15K in income. Having 0 income would be terrible, while having 30k income would be better, but not 'that much' better. As we said, the utility difference between 0 and 15K is much greater than the utility difference between 15k and 30k... because of the assumption of diminishing marginal utility. So it's better to have 15k for sure than to have a 50/50 chance of 0k or 30k.

The 'utility loss from losing 15k' is greater than the 'utility gain from gaining 15k'. As expected utility weights the utility of each outcome by its probability and sums these, in considering a 1/2 chance of losing 15k and a 1/2 chance of gaining 15k these probabilities weight equally, so I only need to consider "does the utility cost of losing 15k exceed the utility gain from gaining 15k" in this example. Because of diminishing MU, we know it does not. Nor does it for any "equal chance of losing or gaining some amount X". Thus this person is risk-averse.

I hope this helps. Looking at the 'utility of income' diagrams may also be helpful.

It's amazing that statistics like these... (seemingly without even minimal obvious controls for age etc.) get reported so naively in the media. Note that one of the interviewees suggests one approach that would provide evidence on the impact of pets on longevity ... random dog assignment. He seems to doubt the health benefits; I don't know, it seems plausible to me, but I'd like to see some real evidence.

I've hedged (a bit). Have you?

we will come back to this when we cover asymmetric information

I just put this up ... last year's final exam with suggested answer guidelines

For problem 6 I'll award 1.5 marks for "CD" even though it's not correct. But I admit you need to look at the wording of this question carefully

Please leave comments and questions here (or in below comments section if you prefer)

If you are going for 'fancy stuff' you might mention markdown, rmarkdown/knitr etc. This will replace latex imho

If you are going to mention latex you should mention Overleaf

Note that I give the reading from the Nicholson and Snyder text at the top of each section.

Several students asked...

This problem seems to be on page 66 of the NS text. On the bottom left, it says, "This person would pay up to distance CD in other goods for the right to buy a second ticket at the original price."

I understand the confusion. They would pay up to C-D for the right to buy this at the given price, in addition to the price, reflected by that budget constraint. So the maximum total amount they would pay for the second ticket is the vertical distance B-D.

Analogy: If I'm on a mountain and I see it is still sloping upwards, I am certainly not at the highest point.

If I am at a "point A" where I can improve my outcome (here, by raising revenue and reducing costs, then "point A" must NOT have been optimal. 'Never locate at point where you can clearly do better!'

Wang Chao:"can you expkain more?why not c to d? and why a is unachievable?"

DR: after buying the first ticket she is at point C. After this, paying vertical distance B-D (in other goods) puts her at point D, which makes her as well off as point B-- thus she is indifferent. She cannot choose point A because of the rationing policy.

Just confirming - (d) IS the correct answer. If the firm can improve upon a choice then that choice must not have been an optimal choice. -DR

Students: Please comment on the questions (choose 1-2) you would like us to cover in tutorial, and if you like, let us know what questions or doubts you have.

This is a challenging problem. Knowing how to solve it and understanding what this means may help you both on the midterm assessment and the final examination

Student asked: Could something like this be on the final exam?

Answer: Yes

Student asked: Would you be able to 'avoid it by choosing a different question with less maths?'

Answer: Possibly/probably, but it's better to learn how to do it ... in case you don't like the other question either.

I should say, 'when it rises because of a shift in the supply curve or because a monopoly seller chooses to raise prices'

Really the principle is that in aggregate people are willing to buy fewer units at this higher price.

This should say RTS as in 'marginal rate of technical substitution' ... fixing it now

This should say RTS as in marginal rate of technical substitution

2019: It's also worth getting a sense of these readings for the midterm. Try to at least get the 'gist' (basic idea) and recall some specific arguments and examples.

These are only indirectly relevant to the midterm; worth skimming/reading if you have time, and may come up later in the module

2019: These are relevant for the midterm

The readings from Autor's course (note these are class notes not an 'academic article') are core and not supplementary... 2019: Relevant to the midterm.

These are indirectly relevant for the 2019 midterm

2019: These are relevant for the midterm ... but you don't need to know all the technical details

the "Khan academy" https://www.khanacademy.org is highly recommended

Student asked:

I am confused because I thought that diminishing MRS meant that it declined as consumption increased? So if Y increases, surely MRS increases as well since MRS=Y?

Ahh, I see a typo here ... it increases as Y increases, which is what we call diminishing MRS. Unfortunately, the term 'diminishing MRS' is confusing the way economists use it, at least in these texts ... it means that as we move 'down' an indifference curve (less Y more X) we are willing to give up less Y to gain a unit of X. So as we move the other way we increase Y (and decrease X) and the MRS rises... when I have more Y I'm willing to give up more of it.

This is backwards -- left is perfect complements (I said 'substitute/) and right is perfect substitutes (I said 'complements'. Rest is correct, wiill fix this shortly.

This illustration needs a small correction --- y2, x2 should line up with the red dot. Will fix it.

THIS is a typo -- I'll fix it!

index 'h' here rather than 'n+h' because f*(r) does not take the (n-vector) x as an argument (it sets these optimally, conditional on the r-vector and computes the output).

It goes beyond this actually; I need to update the 'goals' section

Those were behind the VLE -- the github hosted slides are

HERE ... etc

slides start HERE

Relevant slides start HERE

Relevant slides starth here: https://daaronr.github.io/micro_econ_pandoc/selfc_s_intro_lecture_modules_selfc.html#/economics-and-economic-models-see-esp.-ns1

added some material below (orange) to give insight

I will elaborate on this a bit

this should say 2x1 -- I'll correct it

Does the timing seem right?

we can add specific notes here

Ben Grodeck: I like the definition of Impact. It might be worth mentioning overhead costs and impact aren’t necessarily correlated (or at least not 100%).

DR: I would hope this is well-known in this audience, but you are probably right that it's worth mentioning. 'Overhead ratio' should not be (and does not seem to be) positively correlated to either the 'marginal impact of $1 donated on output' nor to 'marginal impact of $1 donated on ultimate outcomes'

Ben Grodeck: Is empathy innumerate? I thought as numbers got larger, people’s empathy actually decreased. (I see you mention this research later on in the presentation)

where do we find the default (gitbook) template to be able to tweak it?

not sure what this means.

incorporate examples

sub-sub-section?

link actual papers of course

specific example?

add JEL codes and links

need more examples here!

anyone other r4ds_slackers using bookdown?

Anyone in the Slack group interested in sharing comments directly on this page via this hypothesis tool? We can use the tag "r4ds_slackers"

testing a note -- can anyone see this?

I'll try to find time to go through this; going to recommend it to my students at Exeter Uni, Economics. Anyone else on here seeing this?

test -- I will change this word to 'only'

Henrik can you see these notes?

are these interactive/Shiny? I can't get them to 'run'

just testing a comment