ASSIGNMENT 6

Jawab 4 dari 5 soal

1. Chapter Oligopoly
Suppose that we have two firms that face a linear demand curve p(Y ) = a − bY and have
constant marginal costs, c, for each firm. Solve for the Cournot equilibrium output.
Answer:
P = a - bY
P = a - b (Y1 + Y2)

Reaction function for firm 1

● TR1 = P * Y1
TR1 = [a - b (Y1 + Y2)] Y1
TR1 = aY1- bY1Y1 - bY2 Y1
● TC1 = MC * Y1
TC1 = CY1
π = TR1 - TC1
● π1 = ay1 - by12 - by2y1 - cy1
FOC π max
∂π1/∂y1 = 0
a - 2by1 - by2 - c = 0
2by1 = a - by2 - c
y1 = (a - by2 - c)/2b
y1 = ((a-c)/2b) - ((by2)/2b)
● Y1 = (a-c)/2b - Y2/2
● Y2 = (a-c)/2b - Y1/2

If firms are identical

Y1 = Y2 = Y*
● Y* = (a-c)/2b - Y2/2
Y*/1 + Y*/2 = (a-c)/2b
3Y* = (a-c)/2b
Y* = ⅔ (a-c)/2b
Y* = ⅓ (a-c)/b
● Y1* = ⅓ (a-c)/b
● Y2* = ⅓ (a-c)/b
● YT = Y1 + Y2
YT = (⅓ (a-c)/b) + (⅓ (a-c)/b)
YT = 2(a-c)/3b

2. Chapter Game Theory

Are dominant strategy equilibria always Nash equilibria? Are Nash equilibria always
dominant strategy equilibria?
3. Chapter Exchange
Is it possible to have a Pareto efficient allocation where everyone is worse off than they
are at an allocation that is not Pareto efficient?
Answer:
Tidak, karena pareto efficient sendiri merupakan kondisi ketika ekonomi memiliki
alokasi resource pada tingkat efisiensi maksimum, sehingga setiap individu telah
mencapai maximum utility masing-masing. Maka dari itu, tidak mungkin individu
memiliki utility yang lebih tinggi selain pada titik pareto efficient allocation.

Pada kurva diatas, titik M merupakan titik pareto efficient dimana individu A dan
individu B memiliki possible indifference curve yang paling tinggi atau dengan kata lain
telah mencapai maximum utility.

4. Chapter Production
Suppose that Robinson and Friday both want 60 pounds of fish and 60 pounds of
coconuts per day. Using the production rates given in the chapter, how many hours must
Robinson and Friday work per day if they don’t help each other? Suppose they decide to
work together in the most efficient manner possible. Now how many hours each day do
they have to work? What is the economic explanation for the reduction in hours?
Answer:
a) How many hours must Robinson and Friday work per day if they don’t help
each other?
Berdasarkan chapter 33, Robinson bisa memproduksi 10 pounds of fish per hour
sehingga ia membutuhkan 6 jam untuk dapat memproduksi 60 pounds. Selain itu,
Robinson juga bisa memproduksi 20 pounds of coconut per hour sehingga ia
memmbutuhkan 3 jam untuk bisa memproduksi 60 pounds of coconut. Maka dari
itu, total alokasi waktu untuk Robinson bisa memproduksi 60 pounds of fish and
60 pounds of coconuts adalah 9 jam. Sebaliknya, Friday bisa memproduksi 20
pounds of fish per hour dan 10 pounds of coconuts per hour sehingga total alokasi
waktu untuk memproduksi 60 pounds of fish and 60 pounds of coconuts juga 9
jam. Oleh karena itu, baik Robinson maupun Friday, harus bekerja 9 jam per hari
apabila mereka tidak membantu satu sama lain.
 b) Suppose they decide to work together in the most efficient manner possible.
Now how many hours each day do they have to work?
Untuk menghasilkan efisiensi yang maksimal, Robinson bisa memprodroduksi
coconuts untuk kebutuhannya dan Friday (120 coconuts) sehingga ia
membutuhkan waktu 6 jam untuk memproduksi seluruh coconuts. Kemudian,
Friday memproduksi seluruh ikan, baik untuk kebutuhannya maupun Robinson,
sehingga membutuhkan waktu 6 jam untuk memproduksi 120 fishes. Maka dari
itu, setiap individu bisa mendapatkan kebutuhan mereka dengan bekerja 6 jam
daripada 9 jam ketika bekerja sendiri-sendiri.
c) What is the economic explanation for the reduction in hours?
The economic explanation of this phenomenon is the Law of Comparative
Advantage, which states the basis of trade between individuals or countries is that
each specialize in producing that in which they have a comparative advantage.

5. Chapter Welfare
The ability to set the voting agenda can often be a powerful asset. Assuming that social
preferences are decided by pair-wise majority voting and that the preferences given in
Table 34.1 hold, demonstrate this fact by producing a voting agenda that results in
allocation y winning. Find an agenda that has z as the winner. What property of the social
preferences is responsible for this agenda-setting power?
Answer:
Tabel 34.1

Agenda that results in allocation y winning:

Individu X vs Z Result Z vs Y Final Result
 A x Z wins. y Y wins.

B z y

C z z

Agenda that results in allocation z winning:

Individu X vs Y Result Z vs Y Final Result

A x X wins. z Z wins

B y x

C x z

The fact that the social preferences are intransitive is responsible for this agenda-setting
power