A market for an economics textbook has N potential buyers. Each buyer i has a valuation (maximum willingness to pay) given by 8₁. Each buyer distributed over [0,1], i.e. 9;~U [0,1]. Which of the following statements is true: I buy at most 1 unit and valuations are uniformly
Q: b. Discuss how the economy adjusts from the short run to the medium run. What would you recommend…
A: A recession is a condition of the market where there is a shortage of demand than supply. With this,…
Q: The main incentive for an individual to start a business is usually A consumer demand. B C a profit.…
A: Any organization or economic entity that engages in the trade of goods or services with the…
Q: QUESTION 12 How many years will it take to quadruple your investment if your savings account earns…
A: Under compound interest, interest is charged on the accumulated amount that is principal plus…
Q: You are interested in the effect of a new smoking restriction implemented by restaurants. That is,…
A: Given regression equation cigs=β0+β1educ+β2income+β3age2+β4restaurn+β5ln(cigprice)+μFrom the…
Q: Output Total Revenue ($) Total Variable Cost ($) Total Fixed Costs 1 1,000 750 500 2 2,000…
A: Total revenue is the product of price and quantity. Total cost is the sum of fixed cost and…
Q: The following graph shows the loanable funds market. For each of the given scenarios, adjust the…
A: The loanable funds market refers to the market where borrowers (such as households, businesses, and…
Q: 26 25 20 12 10 20 MC 5 10 15 ATC AVC MR If the firm is making a loss, should they shut down? Why or…
A: A competitive market is a market in which there are many buyers and sellers, none of whom has…
Q: 2. You are working as the chief economist for the Ministry of Economy in Peru. For each of the…
A: 2) The IS-LM-FX model was created by economists John Hicks and Alvin Hansen and then improved by…
Q: 6. A central goal of the Affordable Care Act (ACA) the number of uninsured by providing a continuum…
A: The given model tries to estimate the effect of Medicaid expansion programme on private health…
Q: Consider a firm that estimates that its price elasticity of demand equals -1.5. Price equals $36 and…
A: Elasticity of demand measures the quantitative change in the demand in response to the change in the…
Q: EXPENSES (Thousands of dollars per day) 10 9 00 09 5 4 of 10 20 30 40 50 60 TIME (Days) The area of…
A: Here, the firm is expanding, its costs are constantly rising. In this figure, we can see that there…
Q: Based on the graph you drew, Teresa would likely earn a salary of around per year.
A: The table has been provided in the question shows the years of education and corresponding salary.…
Q: Scenario 1: In the market for automobiles, the private cost of one compact car is $20,000 and the…
A: Market equilibrium: At the market equilibrium we have demand equals to supply. Or at market…
Q: 17. Consider q is output level, K is capital input and L is labour input. In the short run, capital…
A: The production function shows the relationship between input such as land, labor, capital, and…
Q: esticide (that is, the marginal social cost of producing the pesticide is double the marginal pr…
A:
Q: Which of the following is considered in the consumption component of the United States' GDP?
A: GDP is the sum of consumption, investment, government purchases, and net export. i.e., GDP =…
Q: was $5.80, all of which was reinvested in the company. The firm's expected ROE for the next four…
A: The total of the present value of anticipated dividends discounted at the needed rate of return that…
Q: The stock of Nogro Corporation is currently selling for $16 per share. Earnings per share in the…
A: The present value of all future dividends will be calculated in order to determine a stock's…
Q: Select all that apply. Suppose there is a positive AS shock that does not change potential output.…
A: Aggregate supply (AS) is the total amount of goods and services that all firms in an economy are…
Q: Explain the difference between total cost, average cost, and marginal cost.
A: Economic cost: The economic cost is different from the accounting cost. Economics cost involves…
Q: 5. Assume Q=K0.25L0.75 (a) Find the total differential dQ. (b) Use the total differential to find…
A: Isoquant is the curve that shows the equal quantity of a good produced with each combination of…
Q: 5. The impact of an expansionary monetary policy (a) On the money markets (b) On the IS-LM…
A: IS curve: IS curve shows different combinations of interest rate and the income. Such that for each…
Q: Suppose you have $35,000 in wealth. You have the opportunity to play a game called "Big Bet/Small…
A: A fair bet is a bet(gamble) which when played has an expected Wealth equals to Wealth without the…
Q: Please consider an oligopoly market. Suppose you were a producer in the market. Would you corporate…
A: The market is the place where buyers and sellers meet and purchase and sell their products. A…
Q: How does a monopolistic market during entry and exit affect economic profit and economic loss? Show…
A: Monopolistic competition refers to a market in which there are a large number of buyers and sellers,…
Q: . Calculate the missing TR and MR amounts.
A: Total revenue is the amount earned from the sale of the output. It can be calculated as follows-…
Q: Suppose that you’ve got $100 in a savings account earning 5% interest. How many years will it take…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: Assume a consumer has a well-behaved utility function (e.g. strictly increasing, diminishing MRS)…
A: MRS stands for "marginal rate of substitution" and is a concept in economics that measures the rate…
Q: 1. In the market for sugar, there has been a discovery of a new technology for more production of…
A: It has been given to us that in the market there has been some kind of technological advancement due…
Q: Suppose the imaginary company of Roobek is a small, Cedar Rapids-based American apparel manufacturer…
A: Fixed costs refer to the costs of production that are not dependent on the output of a firm, i.e.,…
Q: If the inflation rate is 3%, how much will a house now worth $510,000 be worth in 5 years?
A: Inflation= 3% Present worth of house = $510,000 Tenure = 5 years.
Q: A company's revenue function can be defined as; TR= Price (P) x Quantity Demanded (Q). If the…
A: Total revenue is the product of price and quantity. Profit is the difference between total revenue…
Q: Suppose the diagram below shows the floor plan of a room measuring 10 feet by 10 feet. There are two…
A: A rectangle has two sets of equal and parallel sides.
Q: Explain the content and purpose of a credit report?
A: A credit report is a detailed summary of a person's credit history and financial behavior. It…
Q: How does the model of monopolistic competition studied in lectures differ from perfect competition?…
A: Monopolistic competition is a type of market structure in which many firms compete by selling…
Q: A manufacturer can produce at most 100 units of a certain product each year. The demand equation for…
A: In economics, profit maximization refers to the process by which a firm determines the price and…
Q: a. The size of its recessionary gap is $[ 50 b. The size of this gap as a percentage of its actual…
A: Equilibrium in the economy occurs at the intersection of the AD and AS curves. The potential level…
Q: Two mutually exclusive alternatives are being considered as possible ways to reduce traffic…
A: The benefit-cost ratio (BCR), which can be stated in monetary or qualitative terms, is a metric that…
Q: A special-purpose machine is to be purchased at a cost of $30,000. The following table shows the…
A: To determine the economic service life of the new machine, we need to calculate the equivalent…
Q: Neuroeconomics attributes time-inconsistency to high levels of the oxytocin hormone the…
A: Neuroeconomics is an interdisciplinary field that studies the neural and psychological processes…
Q: Why do people engage in white- collar crimes?
A: Confirmation bias is a cognitive bias where individuals seek, interpret, and remember information in…
Q: 5. Understanding marginal and average tax rates Consider the imaginary nation of Leguminis, whose…
A: Citizens only consume BEETS Price of beets = $1 each Plan X: Consumption upto 1000 beets taxed at…
Q: Suppose that a hospital monopolizes the local market for heart surgery, charging $10,000 per…
A: A monopoly is a market where a single seller controls the market to maximize his profit. The…
Q: Answer in detail. The technology plays an important role in the development of an economy. How?
A: Technology refers to the tools, techniques, methods, and knowledge used to create, develop, and…
Q: Consider the standard set up for thinking about statistical discrimination from last class (groups…
A: Statistical discrimination is a phenomenon that occurs when employers or decision-makers use…
Q: Nora's utility function is given by U = In(C) + In(L), where U is utility, C is consumption, and L…
A: The term "labor supply" refers to how much time and effort people are willing to put in for paid…
Q: Problem 1: A company's revenue function can be defined as; TR = Price (P) x Quantity Demanded (Q).…
A: Since you have posted multiple questions, we will provide the solution only to the first three…
Q: Your company's cost function (monthly) can be defined as; TC = cost per unit (AC) × quantity…
A: “Since you have posted a question with multiple sub parts, we will provide the solution only to the…
Q: Problem #3. Suppose the official price of 1 ounce of gold in the US is 21.60 dollars and the…
A: Price of Gold in US = 21.60 dollars Price of Gold in UK = 3.6 pound sterling Exchange rate refers…
Q: QUESTION 8 Every year for 10 years starting year 2, you deposit $2000 in a savings account that…
A: We must compute the total of the current values of each deposit in order to determine the present…
Step by step
Solved in 3 steps
- A firm faces two types of consumers. Consumer A has an inverse demand of P = 120-10 Q and consumer B has an inverse demand of P = 60-2Q. The firm has a constant marginal cost of $20. Assume the firm does not know which type a given consumer is. She offers to sell the good at a price of 70$ per unit. However, if the customer buys 10 or more units, she will offer a quantity discount and charge only 40$ per unit (including the first 10). Which consumer will use the price discount? Question 7 options: Neither costumer will purchase from this firm at all. Customer A will choose the quantity discount and customer B will not choose the quantity discount. Both consumers will chose the quantity discount. Neither of the two consumers will opt for the quantity discount. Instead, both will purchase at the higher price of 70 and buy less than 10 units each. Customer B will choose the quantity…A firm with market power has an individual consumer demand of Q = 10 − P and total costs of C = 2Q. What is the optimal amount of this product to package in a single block? Multiple Choice 6 2 4 8Given the industry demand function X(p) = 100 - 2p, consider the following scenarios: a) The market is a perfectly competitive market. Assume there are identical firms with marginal cost of 12 in this perfectly competitive market. b) The market is dominated by one monopolist with a marginal cost of 12. This monopolist is able to achieve first degree pricing. c) The market is dominated by one monopolist with a marginal cost of 12, but the monopolist is able to achieve only second degree pricing. Assume the menu offers only 2 choices:(Q1= 30; P1= 35), and (Q2= 60; P2= 20). d) The market is dominated by one monopolist with a marginal cost of 12, but the monopolist now uses third degree pricing. Assume the firm can distinguish between low-demand consumers on the weekday and high-demand consumers on the weekend such that Qh = 55 - (1/2)Ph andQl= 45 - (3/2)Pl. The monopolist charges a difference price, Pl and Ph, in each distinct market. e) The market is dominated by one monopolist that is…
- A new market appears that works according to the rules of the Stackelberg model. The costs of firms on this market as a function of individual supply q is C(q) = f + Cq^2, where both F > 0, C > 0. The demand is P(Q) = A - BQ as afunction of total supply Q, with A > 0, B > 0. What is the quantity of followers on the market assuming free entry (as a function of A B C and F) Assume entry costs Z, what is the new equilibrium quantity of firms?GM’s Food Shops has completed a study of weekly demand for its “new-fashioned” tacos in 53 regional markets. The study revealed that where Q is the number of tacos sold per store per week, A is the level of local advertising expenditure, Pop denotes the local population (in thousands), and Pr is the average taco price of local competitors. For the typical GM’s outlet, P = P1.50, A = P1,000, Pop = 40, and Pr = P1. Q = 400 - 1,200P + 0.8A + 55Pop + 800Pr Estimate the weekly sales for the typical GM’s outlet. Determine the equilibrium price and equilibrium quantity, if supply is Qs = 700 + 1,200P considering the general demand function of GM’s outlet Should GM raise its taco prices? Why or why not?The market for widgets is characterized by many buyers but only two producers, A and B. The market demand for widgets is given by: P = 500 − 10QD where QD = total demand for widgets Both producers face the same production cost, which is $120 in fixed cost and a constant variable cost of $20 per widget. Determine the profit-maximizing levels of output by producers A and B if they both choose the quantity of widgets produced simultaneously. What is the profit for each producer? If both producers collude, what is the equilibrium price and quantity? What is the profit for each producer? (You can assume the firms will share the market equally). Compare your answers to parts (a) and (b). Which outcome (collusive or non-collusive) would the producers prefer? Explain. Which outcome (collusive or non-collusive) is a more stable outcome? Explain. Note: Be sure to show your work.
- Based on the best available econometric estimates, the market elasticity of demand for your firm’s product is –2. The marginal cost of producing the product is constant at $150, while average total cost at current production levels is $225.Determine your optimal per unit price if:Instructions: Enter your responses rounded to two decimal places.a. You are a monopolist.$ b. You compete against one other firm in a Cournot oligopoly.$ c. You compete against 19 other firms in a Cournot oligopoly.$3) A firm produces two goods Q1 and Q2 with the following demand functions: P1 = 315 – 4Q1 P2 = 260 – 3Q2 2 2 and a joint total cost function TC = 2Q1 + 3Q 1 Q 2 + Q2 + 400 Find (a) the profit maximizing level of output for Q1 and Q2. (b) the market clearing prices P1 and P2 (c ) the maximum profit the firm could earn Also,(d) use the Hessian determinant to evaluate the second order condition and interpret your resultsConsider the online learning problem with demand learning. The firm sells a product without any historical demand information. In each period, the firm can set a price and would observe a demand based on the charged price. Suppose the true demand function in each period is D(p) = 9−3p+ϵ, where ϵ is a random variable with zero mean. The marginal cost is negligible. (a) What price should the firm charge if you know the demand function? What would be the expected revenue if the firm implements this price for n periods? (b) Suppose you do not know the demand function, but know that the demand is a linear function, and the slope is 3. In other words, you know that demand is D(p) = a − 3p + ϵ and would like to estimate a from the data. Suppose from the historical data, you have k pairs of demand and price, i.e., (p1, D1),(p2, D2), ...,(pK, DK). Suppose you would like to minimize the residual sum of square, i.e., min a X K i=1 (Di − a + 3pi) 2 . (1) What would be your best estimate of a?…
- Miron Floren, of Lawrence Welk Show fame, now tours the country performing at accordion concerts. A careful analysis of demand for tickets to Mr. Floren’s concerts reveals a strange segmentation in the market. Demand for tickets by senior citizens is described by Qo = 500P^–3/2 , while demand by those under 65 years old is Qy = 50P^–4. If the marginal cost of a ticket is £3, how should tickets to Mr. Floren’s concerts be priced to maximize profits? A. £3 for senior citizens and £8 for those younger B. £6 for senior citizens and £12 for those younger C. £9 for senior citizens and £4 for those younger D. £4.71 for all tickets E. £12 for senior citizens and £4.50 for those youngerBased on the best available econometric estimates, the market elasticity of demand for your firm’s product is −2.5. The marginal cost of producing the product is constant at $225, while average total cost at current production levels is $300.Determine your optimal per unit price if:Instructions: Enter your responses rounded to two decimal places.a. you are a monopolist. $ b. you compete against one other firm in a Cournot oligopoly. $ c. you compete against 19 other firms in a Cournot oligopoly. $ Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.In a small college town there is only one movie theater. In a given month, if the theater is open, the owners have to pay a fixed amount of $6,000 for the films, ushers, etc., regardless of how many people come to the movies. For simplicity, assume that if the theater is closed, its costs are zero. The demand function for movie tickets in the town is characterized by ??= 45−QT/60 a. Find the profit-maximizing price and quantity of movie tickets, and indicate them on the graph above. How much would the theater make in profits? b. Suppose the local government implements a property tax, so that each month the theater now must pay a lump sum tax of $700. What will be the price and quantity of movie tickets under this tax?