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Unit: EFIM10023 Mathematics for Economics Assessment’s contribution to unit: 10%
Release Date: 23/06/2025
Submission Date: 21/07/2025 at 11:00 am
Feedback Released: 21/08/2025
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Students are strongly advised to submit their work ahead of the deadline. Should you have a problem with submission
to Blackboard you should email ec[email protected] for guidance immediately.
• Your video should not exceed 10 minutes. Exceeding this limit will incur a penalty. Details relating to penalties are at the end of this document.
• Assignments handed in after the deadline, without a pre-arranged extension, will be subject to late penalties.
Details relating to penalties are at the end of this document.
• Your assignment should be combined into a single document and submitted as a video with a Word document containing the student numbers.
• Your answer will be assessed using the University Marking Criteria.
This is a piece of COURSEWORK that contributes to your Unit mark and you can:
• Use resources to support you in completing your answer.
• Draw upon a range of accepted resources including, your own notes, lecture slides/recordings, course material, textbooks, journal articles, online resources. ALL work should be written in your own words.
• Ask for help from your personal tutors or academic lecturers if you do not understand an aspect of the coursework.
• Broad discussion with your tutors, fellow students, friends and family on the assessment topic and your ideas/approach may help you to further your knowledge and understanding.
• Use your network of family and friends to gain support and encouragement during the assessment period.
Please remember this is a formal assessment and you should behave in a manner consistent with our values. This means you cannot:
• Allow others to directly contribute to your answer by revising or adding to the academic content. This is collusion and is against University Regulations.
• Share your assessment with others or ask others to share their work with you.
• Copy and paste any material (text, images, coding, calculations) from other sources, including teaching material and shared revision notes directly into your answer without appropriate acknowledgement. This is plagiarism and is against University Regulations.
• Pay another person or company to complete the assessment for you. This is contract cheating and is against University Regulations.
In this assignment, you are expected to solve the following open question and present the solution as a video. The video will be judged on its “raw content”, i.e., how it addresses the initial question, but also on the “pedagogical aspect”, i.e., how easy it is for a student to understand the solution.
One economist wants to understand the consumption of housing in the United Kingdom. She assumes that households have the following utility:
where ch denotes the consumption of housing and cn denotes the consumption of the rest (non-housing, hence n). We have also 0 < α < 1.
She would like to estimate ρ in the data; she is less interested in α.
1. Calculate the (log) marginal rate of substitution between housing and non-housing. as a function of the (log) relative consumption.
2. Intuitively, the marginal rate of substitution between housing and non-housing should relate to the relative price between housing and non-housing ph/pn. How, and why?
3. Assume that the economist observes the (different) relative expenditures (phch)/(pncn) and relative prices ph/pn faced by individuals surveyed all across the United Kingdom. How could she use the data to estimate the parameter ρ (using the previous questions)?