Micro Midterm

See if you can finish it in 50 minutes.

Power of the Nobel Prize

Today, at the beginning of the game theory lecture,

"Class, since this year the nobel prize of economics is given to two distinguished game theorists, our teaching schedule will be changed as to incorporate their ideas, the rest of our course material will be entirely different from last year. And I have put the link of the 2005 nobel prize advanced information on our course webpage, this is what we will cover next lesson." He announced.

My god, how can an undergraduate student understand this year nobel prize winner's ideas? Moreover, there is no textbook for that, only the notes provided by the Royal Swedish Academy of Science!

It seems that my only academic investment this semester--- buying the game theory textbook (Games of Strategy), is a failure. Oh, I nearly forgot to tell you that, he also said, "Look at the section 4 'Recommended readings" of the pdf file, you can find our texbook by Dixit and Skeath (2004), so you guys really have made a good choice." What else can I say?

Stigler

Two books by him:



The above one is the theses collection.



This one is full of jokes.

And there is a particular funny chapter in the latter, "How to pass Examinations in Economics", which consists of nine lessons.

Lesson 1: A statement that can be False is False.
Lesson 2: A tax on corporation profits is not a variable cost.
Lesson 3: A statement that can be True is True.
Lesson 4: Know your economy.
Lesson 5: Know your logic.
Lesson 6: Not every entrepreneur is greedy.
Lesson 7: Read and write carefully.
Lesson 8: Not everybody understands Keynesian Economics.
Lesson 9: Nobody knows the suffering that farmers(and students) do.

The details should leave to you, however, please let me tell you one more interesting point. In answering True or False questions, he suggested, T means Theoretically, while F means Fantastic, and we can, strictly speaking should, write (T --- but really F) or (F --- but really T).

A small discovery

I have found an easy way to remember the index number.

Laspeyres Index of Quantity:


Paasche Index of Quantity:


For the price index, we need a mirror image,

Laspeyres Price Index:


Paasche Price Index:


Hope that can help you to remember the index number, if you do not understand it at all, sorry all the above is not for you, surely the following joke too.

If we only know the prices and goods purchased yesterday, together with today prices, we can only show that we are worse off.

Some words from the famous

Leonardo da Vinci:

Obstacles cannot crush me. Every obstacle yields to stern resolve. He who is fixed to a star does not change his mind.

Mohandas Gandhi:

A small body of determined spirits fired by an unquenchable faith in their mission can alter the course of history.

Martin Luthur King Jr.:

An individual who breaks a law that conscience tells him is unjust, and who willingly accepts the penalty of the imprisonment in order to arouse the conscience of the community over its injustice, is in reality expressing the highest respect of law.

I have found my star, but never think of making (intellectual) history, needless to say, to bear the high cost of freeing others (intellectually).

I discovered the Fisher Curve

"It is not generally known that the first statistical investigation of the relation between inflation and the unemployment rate was performed not by A.W. Phillips in 1958 but by Irving Fisher in 1926."


I Discovered the Phillips Curve: "A Statistical Relation between Unemployment and Price Changes". Irving Fisher. The Journal of Political Economy, Vol. 81, No. 2, Part 1. (Mar. - Apr., 1973), pp. 496-502.

Abstract
The possible relation between changes in the price level and changes in the volume of employment, much discussed by economists at the present time, has already been debated in the pages of the Review. In the present article Professor Fisher, one of the foremost authorities on monetary problems and for years a protagonist of stabilisation, removes the question from the sphere of controversy to that of exact statistical research. He has found a remarkably high correlation between the rate of price changes and employment, and he describes the methods by which he has achieved this result. The data used refer exclusively to the United States, and further research would be required before the conclusions could be applied directly to other countries. Nevertheless, this objective statistical confirmation of a relation long asserted to exist is a highly important step in advance.