A risk-neutral worker can choose Low or High effort. The manager cannot observe the worker's action, but the manager can observe the realized revenue for the firm (either $300 or $500). Low Effort Cost for worker= $0 Probability Low Revenue ($300)=80% Probability High Revenue ($500)=20% High Effort Cost for worker= $40 Probability Low Revenue ($300)=40% Probability High Revenue ($500)=60%
Q: s COSTS AND REVENUE (Dollars per shirt) 8 8 O 5 2 Marginal Cost Marginal Revenue 1 1•1• 9 ?
A: As per the question market type in the above scenario is perfectly competitive . Optimal…
Q: please answer the following question: 1. Automatic stabilizers: A) work without the need for…
A: A boom illustrates a phase of elevated or rised growth within a business, market, industry, or…
Q: How much do you need to deposit in an account today in order to have $11,000 in the account in 6…
A: Every commercial bank decides its Annual Percentage Rate (APR) range based on the interest rate set…
Q: Why does the marginal product of labour fall as more workers are hired? Motivate your answer.
A: A change in the output caused by using one additional unit of a specific input is known as a…
Q: The following situation will be used in questions 3, 4 and 5. A hotel is projected to have $ 55 mi…
A: The Estimated Hotel value:- Year Formula 1 2 3 4 5 6 7 - Growth rate (Revenue) 1.02 1.03…
Q: marginal factor cost is the extra cost of producing one more unit of output. True False
A: The marginal factor cost is the extra cost of engaging extra unit of input or factor.
Q: Susan is a single mother with three children. She can earn $8 per hour and works up to 2,000 hours…
A: The table is divided into three columns, with the first column listing Susan's annual work hours,…
Q: f the consumption function is C = C (Y - T) = 0.75 (Y - T) and there is an increase in output of 200…
A: Given Consumption function: C=0.75(Y-T) ..... (1) Increase in output =200 million…
Q: In a Poisson distribution, = 3.30. (Round your answers to 4 decimal places.) a. What is the…
A: The probability mass function for the Poisson distribution is, e-λλxx! , x=0,1,2,3.... The mean of…
Q: ii) Monetary policy in a liquidity trap. Suppose the money demand is given by: M = $Y (0.25-i) as…
A:
Q: The barrier to entry that protects natural monopoly is Question 2 options: Better products.…
A: A monopoly firm is generally characterized by single or very few sellers and large number of buyers.…
Q: A machine that produces a certain piece must be turned off by the operator after each piece is…
A: Given:- Machine produces=50,000 pieces Operator earns=$5 Brake require servicing=After 520 hours…
Q: Price and cost (dollars) 20 15.75 21 6,000 A B 8,000 SMC 1000 ATC AVC D-MR-$20 Quantity The above…
A: Introduction Perfect competition is a form of market where a large numbers of firms producing the…
Q: off, thus preventing the operator from removing the piece quickly before producing th would reduce…
A: The PW method is quite popular in industry since all future costs and revenues are changed to…
Q: In the dynamic model of AD-AS in the diagram to the right, if the economy is at point A in year 1…
A: In AD/ AS graph, a rightward shift or increase in Aggregate demand will make output to rise along…
Q: 12
A: The income expenditure model shows the relationship between income and expenditure in an economy. It…
Q: What is pump-priming?
A: Pump priming is the term used to describe the overall stimulation actions done by the government,…
Q: Since 1987, hundreds of hospital mergers have taken place in the United States, and rarely has the…
A: HHI is an index to measure market power in the industry
Q: Suppose that legalizing the use of heroin would decrease its price by 79 percent. If the price…
A: Price elasticity of demand refers that it shows the change in demand due to change in price , if the…
Q: If the inflation rate is 6% per year, how many (future) dollars will be required 10 years from now…
A: Here, given information is: Inflation rate (r): 6% per year Present value (P): $32,500 Time period…
Q: 2. The Daisy-land's economy is described as follows: Y=C+I+G; Y=10,000; G=2,000; T-3,000;…
A: Private saving is the total amount of savings done by the private (financial and non-financial)…
Q: Economics 4. What is meant by an error components model (ECM)? How does it differ from FEM? When is…
A: In data analysis 3 types of data are considered. Cross sectional, time series and pooled data. In…
Q: c) Consider a market in which the market demand curve is given by P= 18 - X - Y, where X is Firm I's…
A:
Q: e the channels through which the cash rate influences Monetary pol
A: Official money rate (OCR) is the pace of interest charged by the national bank on for the time being…
Q: Use information below to compute the actual unemployment rate (U%) and the labor force participation…
A: Labour Force Participation Rate:- It is a projection of the labour force that is actively employed…
Q: A good costs $5 in the US. The exact same good costs 20 pesos in Mexico. What is the nominal…
A: Purchasing power parity (PPP) is both an exchange rate theory and a method for making more accurate…
Q: 5. What is the efficient rental rate in this market (S/apt.)? 6. What is the efficient rental…
A: The forces of demand and supply as represented by demand and supply curves respectively can be used…
Q: Currently, your unit labor cost is $9.40 and you have an automation rating of 4. You change the…
A: Given the following information: *Unit labor cost at present =$9.40*Automation rating increases from…
Q: What is pump-priming?
A: Pump Priming is an economic term which is associated with the government actions.
Q: Nigeria has a positive trade balance of $10 billion. If it has a negative balance of services of $8…
A: Balance of trade is otherwise called net export, trade balance, or global trade balance.
Q: The graph shows the market for grain. Draw a point to show the quantity produced when the price is…
A: Given the information: *At a price $4, MR and MC are equal. *MC curve cuts the ATC curve from the…
Q: Find the marginal product of capital for the following production function and show if it has…
A: Returns to scale explain how production evolves over time in response to an increase in all inputs.…
Q: Texarkana Electric Company buks The marginal benefit of annual electricity consumption and the…
A: Externality is the cost or benefit that the market transaction brings to the third party. It can be…
Q: Suppose the book-printing industry is competitive and begins in a long-run equilibrium. Then Hi-Tech…
A: Long-run equilibrium happens when aggregate demand rises to short-run aggregate supply at a point on…
Q: The State of Chiapas, Mexico, decided to fund a program for improving reading skills in elementary…
A: Ans Solution
Q: Explain. Incorrect as well In an imperfect market, individual firms: a. are always able to…
A: In business and economics, a market is defined as where the sellers and consumers meet to facilitate…
Q: Good x Refer to the diagram above. The budget line shift which moves the consumer's equilibrium…
A: Given The budget line shifted from BC to AC. Due to this consumer's optimal position is to move…
Q: Question: Explain the distinction between monetary and fiscal policy by focusing on how each type of…
A: Governments use a wide range of economic policies to manage their economy. To influence production,…
Q: Suppose we use the linear probability model to estimate the effect of household income on the…
A: Willingness = 22.34 - 0.04HouseholdIncome Therefore, 22.34 is the Intercept -0.04 is the slope…
Q: Help....... Solve Write Company has a maximum capacity of 200,000 units per year. Variable…
A: The break-even point is the point at which total cost and total revenue are equal, meaning there is…
Q: 1.The fact that it takes time for government officials to recognize an economic problem in is one…
A:
Q: Consider a country which taxes two goods, diamonds and bread. Each good has a supply elasticity of…
A: Given information Two products Bread and Diamond Elasticity of supply for both goods=1 Elasticity…
Q: Suppose the following table illustrates the hypothetical values of actual Real GDP (Y), the…
A: We will utilize the Taylor rule and Phillip curve for solving this question The Taylor rule is given…
Q: What are the economic effects of public debt?
A: Introduction - Economic growth may be affected by public debt in nonlinear ways. Therefore, an…
Q: Question 62 Question 62 2 3 4 5 6 7 8 (Table: Demand and Total Cost for Asgard) Use Table: Demand…
A: The expenses that are incurred for carrying out day-to-day transactions of the business are known as…
Q: +/10 X R x Y GDP is 1000, while current GDP is 960, what is the change in autonomous net transfers…
A: GDP (GDP) is the standard proportion of the worth added made through the creation of labor and…
Q: Robots on the farm Commercial farms of the future may be staffed by robots that will identify,…
A: The value of marginal product is marginal product multiplied by the labour product. VMP = MP×P The…
Q: Suppose that the economy has an inflationary gap. Which of the following policies would most likely…
A: Inflationary gap is a situation where the actual demand is greater than the potential demand.…
Q: 5
A: Product refers to the output produced by the manufacturers or the producer with an aim or purpose of…
Q: Question 2: Suppose a firm has the following production function: Q(L,K)= min{K, 2L} Recall that the…
A:
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- the probability of reaching the wrong conclusion to 0.05 the probability of a Type II error equal to 0.05 the probability of reaching the correct conclusion equal to 0.05 the probability of a Type I error equal to 0.05 attached in ss below thanksAn electronics company gives a warrantee on a $150 eReader that covers accidentaldamage (AD) and theft (T). Due to the costs associated with fixing an eReader, it ischeaper for the company to credit the buyer the full price of the product to purchaseanother one. In any given year, there is a 5.1% chance that an AD claim is filed. Assumeonly one claim can be filed (not one of each type).If a customer reports an eReader as stolen, the company will credit the customer 80% ofthe product's full price. In a given year, there is a 3.5% chance that a T claim is filed.If the warrantee costs $15.95 for one year, what is the company's expected financialgain/loss on each contract?(NOTE: Remember that a customer will pay for the warrantee up-front, whether or not aclaim is filed.)A health economist is conducting the analysis and making a choice between the following two choices: Choice A: there is a certain outcome that the patient will stay in chronic health state X for the rest of his life T Choice B: the treatment has two possible outcomes, either the patient is returned to full Health (1) of the rest of his life T with probability p; the patient dies (0) immediately with the remainig probability What is the utilty value of the health state X? X=P X=PT X=(1-P)/P X=PT/(1-P)
- A principal is considering hiring a lawyer to represent him or her in a lawsuit. The principal gets $ 250 000 if the suit is won and $0 otherwise. If the agent works hard (100 hours), there is a 50% chance that the principal will win the suit. If the agent does not work hard (10 hours), there is a 15% chance that the principal will win the suit. Without a lawyer, the principal is sure to lose the suit. The principal can monitor the agent, and both parties are risk neutral. The agent's utility function is m-50e, where m is money in dollars and e is effort in hours. The agent's fee for this case is $100 per hour, and the outside opportunity is worth $500. Write down the game in extensive form and solve it.Suppose that there are two types of workers: high and low. Employers cannot distinguish between different types during an interview. Employers value high type at $200,000 and low type at $100,000. Employers are in a competitive market (i.e. zero profit applies). High type workers have a reservation wage of 140,000 and low type workers have a reservation wage of 80,000. Suppose that 50% of all workers are high type. The productivities, reservation wages, and the probabilities are common knowledge). What wage would the employers offer? Please explain the solution!John wants to buy a used car. He knows that there are two types of car in the market, plums and lemons. Lemons are worse quality cars and are more likely to break down than plums. John is willing to pay £10, 000 for a plum and £2, 000 for a lemon. Unfortunately, however, he cannot distinguish between the two types. Sellers can offer a warranty that would cover the full cost of any repair needed by the car for y ∗ years. Considering the type and likelihood of problems their cars can have, owners of plums estimate that y years of guarantee would cost them 1000y, owners of lemons estimate that the cost would be 2000y. John knows these estimates and decides to offer £10, 000 if a car comes with y ∗ years of warranty, £2, 000 if a car comes without warranty. For which values of y ∗ is there a separating equilibrium where only owners of plums are willing to offer the y ∗ -years warranty? Clearly explain your reasoning.
- You need to hire some new employees to staff your start-up venture. You know that potential employees are distributed throughout the population as follows, but you can’t distinguish among them: Employee Value Probability $50,000 0.25 $60,000 0.25 $70,000 0.25 $80,000 0.25 What is the expected value of five employees you hire?If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he expects a crop of 55,000 bushels. The cost of pesticides is $20,000 and the other costs associated with planting and harvesting the crop total $450,000. The price of corn at harvest time will either be $10.00 with probability of 0.50 or it will be $12.00 with probability 0.50, so if the farmer decides to sell the crop at harvest, the expected price per bushel that he will receive is $11.00. If the farmer uses pesticide and decides to sell the crop at harvest, what is his expected revenue? a. $720,000.00 b. $600,000.00 c. $605,000.00 d. $660,000.00If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he expects a crop of 55,000 bushels. The cost of pesticides is $20,000 and the other costs associated with planting and harvesting the crop total $450,000. The price of corn at harvest time will either be $10.00 with probability of 0.50 or it will be $12.00 with probability 0.50, so if the farmer decides to sell the crop at harvest, the expected price per bushel that he will receive is $11.00. If the farmer uses pesticide and decides to sell the crop at harvest, what is his expected profit? a. $135,000.00 b. $250,000.00 c. $210,000.00 d. $190,000.00 If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he expects a crop of 55,000 bushels. The cost of pesticides is $20,000 and the other costs associated with planting and harvesting the crop total $450,000. The price of corn at harvest time will either be…
- If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he expects a crop of 55,000 bushels. The cost of pesticides is $20,000 and the other costs associated with planting and harvesting the crop total $450,000. The price of corn at harvest time will either be $10.00 with probability of 0.50 or it will be $12.00 with probability 0.50, so if the farmer decides to sell the crop at harvest, the expected price per bushel that he will receive is $11.00. If the farmer does not use pesticides and decides to sell the crop at harvest, what is his expected revenue? a. $550,000.00 b. $660,000.00 c. $600,000.00 d. $605,000.00Q1) An expected utility maximiser owns a car worth £60000£60000 and has a bank account with £20000£20000. The money in the bank is safe, but there is a 50%50% probability that the car will be stolen. The utility of wealth for the agent is u(y)=ln(y)u(y)=ln(y) and they have no other assets.If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he expects a crop of 50,000 bushels. The cost of pesticides is $30,000 and the other costs associated with planting and harvesting the crop total $450,000. The price of corn at harvest time will either be $9.00 with probability of 0.50 or it will be $11.00 with probability 0.50, so if the farmer decides to sell the crop at harvest, the expected price per bushel that he will receive is $10.00. The corn farmer is considering two alternatives for selling his crop. The first is a contract where he can sell the rights to the future crop at planting. The second is to sell the crop after harvest. What is the maximum a purchaser would be willing to pay to the farmer for the rights to the future corn crop assuming they cannot monitor the farmer after purchasing the contract? a. $600,000.00 b. $550,000.00. c. $500,000.00 d. $540,000.00