How does the number of bidders affect the optimal bid?
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wtp could vary
economic costs involve
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all decision relevant costs
- to an economist, all decision relevant costs (whether explicit or implicit)
are opportunity costs are therefore included as economic costs
accounting costs
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the total of explicit costs that have been incurred in the past
Arbitrage
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Arbitrage is the simultaneous purchase and sale of the same asset in
different markets in order to profit from tiny differences in the asset's listed
price. It exploits short-lived variations in the price of identical or similar
financial instruments in different markets or in different forms.
how we play the game determines the outcome of the game i.e. is it simultaneous or
sequential
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, full information
timing - one shot, simultaneous move game
solution conceot of the game
dominant strategy equilibrium, Nash equilibrium
Different prices give different Q's firm would consider producing
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Perfect competition operates
At P2,P3 and P4
P=MC
at P1, P<AVC
so firm shuts down as effectively
P = MC = 0
as P = MC economic efficiency
intertemporal price discrimination
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Charge a high price when the good first becomes available, then a lower
price later on..
Brand new Samsung mobile phone
Hardcover books
Movies on google play
, elasticity of substitution
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a measure of how easy it is for a firm to substitute labour for capital
Capital labour ration: quantity of capital to the quantity of labour
K/L at A = slope of ray 0A= 4
MRTS at A=4
K/L at B = slope of ray 0B = 1
MRTS L,K at B = 1
Along line OA , K/L = 4
Any point along this line will have the same K/L ratio
Along line OB , K/L = 1
Any point along this line will have the same K/L ratio
Risk and information
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Pre-industrialised societies reduced risks by gifting and sharing;
diversifying food production strategies; prayer and sacrifice
Nowadays we have insurance companies, banks, police and fire
departments, financial markets
Interesting to note that households are willing to pay both to take risks
(lottery, casinos, race tracks, extreme sports) and avoid them
Perception of risk does not always objectifiy risk
Give this one a try later!
wtp could vary
economic costs involve
,Give this one a try later!
all decision relevant costs
- to an economist, all decision relevant costs (whether explicit or implicit)
are opportunity costs are therefore included as economic costs
accounting costs
Give this one a try later!
the total of explicit costs that have been incurred in the past
Arbitrage
Give this one a try later!
Arbitrage is the simultaneous purchase and sale of the same asset in
different markets in order to profit from tiny differences in the asset's listed
price. It exploits short-lived variations in the price of identical or similar
financial instruments in different markets or in different forms.
how we play the game determines the outcome of the game i.e. is it simultaneous or
sequential
Give this one a try later!
, full information
timing - one shot, simultaneous move game
solution conceot of the game
dominant strategy equilibrium, Nash equilibrium
Different prices give different Q's firm would consider producing
Give this one a try later!
Perfect competition operates
At P2,P3 and P4
P=MC
at P1, P<AVC
so firm shuts down as effectively
P = MC = 0
as P = MC economic efficiency
intertemporal price discrimination
Give this one a try later!
Charge a high price when the good first becomes available, then a lower
price later on..
Brand new Samsung mobile phone
Hardcover books
Movies on google play
, elasticity of substitution
Give this one a try later!
a measure of how easy it is for a firm to substitute labour for capital
Capital labour ration: quantity of capital to the quantity of labour
K/L at A = slope of ray 0A= 4
MRTS at A=4
K/L at B = slope of ray 0B = 1
MRTS L,K at B = 1
Along line OA , K/L = 4
Any point along this line will have the same K/L ratio
Along line OB , K/L = 1
Any point along this line will have the same K/L ratio
Risk and information
Give this one a try later!
Pre-industrialised societies reduced risks by gifting and sharing;
diversifying food production strategies; prayer and sacrifice
Nowadays we have insurance companies, banks, police and fire
departments, financial markets
Interesting to note that households are willing to pay both to take risks
(lottery, casinos, race tracks, extreme sports) and avoid them
Perception of risk does not always objectifiy risk
