Assume a firm located in a non-urban location pays a wage of $34/hour. However, it is assumed that there is a 20% chance that workers incur "switching costs" of $14/h. a) what is the expected wage? b) If a firm in an urban cluster wants to match the expected wage (and all else is equal), what should it pay assuming that urban switching cost is only $10 and the chance that switching is necessary is only 10%.
Q: machine part can be exhausted either from aluminum or steel. There is an order of 8,000 units. Steel...
A: We have, Order quantity = 8000 units. Steel cost = P 3.80 per kg Aluminum cost = P 8.70 per kg Steel...
Q: A topic on optimal pricing, elasticity, stay-even analysis, or cost-based pricing.
A: There are many measures that the sellers can to maximize their profit. one of the measures is optima...
Q: Suppose the economy is four sectors economy. The economy is represented by the following: C = 400 + ...
A: Aggregate expenditure equation: AE = C + I + G + NX => AE = 400 + 0.40Yd + 25 + 40 + (-25) Note: ...
Q: The four statements below each describe a different market, highlighting one teature of that market....
A: The structure that depicts the way in which firms are being categorized and differentiated based on ...
Q: How Satya Nadella manage and run micorsoft?
A: Nadella has worked his way through a variety of roles at Microsoft over the years, some focused on e...
Q: Given the two machines’ data Machine A ...
A: Given information Machine A Initial Cost=P8000 Annual operation cost=P3000 Annual maintenance cost=P...
Q: Country A is a large Importer of good 1. If country A imposes a sighifficant import tariff on good O...
A: Trade is defined as the exchange of commodities and services across the boundary of the country. In...
Q: Explain why modern macroeconomics is simply microeconomics, but at a high level of aggregation.
A: Microeconomics and macroeconomics are the two important branches of economics theory. Microeconomics...
Q: Abhijit deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year later...
A: Deposit=$100Annual interest rate=5%Now,Value of deposit after one year=100+5%Value of deposit after ...
Q: How COVID-19 affect the domestic market?
A: Domestic market refers to internal market that implies a trade within the border of the country. It ...
Q: 1) Bargaining Adam has a car in good condition that he uses daily and that he values at 4000$. Blair...
A: Surplus of a company addresses the abundance of its resources over its liabilities in addition to sh...
Q: what exit strategy are available to firms who desire to leave a market during the Covid 19 pandemic
A: The exit strategy is a strategy that is used by the firm to exit the market strategically. It is a s...
Q: Identify which options are usually incorrect for a company that has some degree of market power. a...
A: There are two types of market economy: Perfectly competitive Imperfectly competitive In a perfect ...
Q: Below is an Edgeworth box of two individuals, Ross and Rosa, in the consumption of two goods, X and ...
A: Introduction Edgewoth box diagram belongs to the welfare economics. This concept has based on Pareto...
Q: Is the following statement TRUE or FALSE? Please provide reason for the answer. The marginal propen...
A: The amount of money spent on products and services is referred to as consumption. Savings and consum...
Q: Examine in details Four (04) different sourcing approaches that could be used by procurement experts
A: Sourcing aims to locate, assess, and engage suppliers in order to save money and get the best deal o...
Q: 1. An expected utility maximizing individual has utility of end-of-period wealth given by wl-r –1 , ...
A: Given information Utility function u(W)=W1-γ-11-γ--- If γ not equla to 1u(W)=lnW--- if γ=1
Q: Which of the following most increased our understanding about the heritability of personality? 1.res...
A: The answer is - 1.research on identical twins raised apart
Q: 1. Suppose a closed economy has national income of $50 million, Investment of $2 million, Inflation ...
A: Total tax rate= (Net tax rate+Rate of inflation)=(15+5)%=20% Total tax revenue=T= $(50*0.2) mil=$10 ...
Q: Consider each scenario described below for the supply of t-shirts: • If there was an increase in pri...
A: Demand curve shows the quantity demanded by the customers at different prices in the market over a p...
Q: Opportunity cost is all about making choices and how you adequately and effectively manage it. What ...
A: Managerial economics aspects is characterized as discipline of financial matters worried about use o...
Q: b.) Governments are aware of the impact of Imports on their economy bu because they also want their ...
A: Six instrument of trade protection:- 1) Tariff:- Tariffs are among the earliest known instruments us...
Q: Explain the basics of foreign and domestic competition?
A: Competition is an integral part in economics, it is the basis of various forms of market. Quality go...
Q: Table 24-4. Will's expenditures on food for three consecutive years, along with other values, are p...
A: An expenditure is a monetary payment for goods or services made using cash or credit. Unlike a cost ...
Q: Explain market conditions in the long run
A: In the long run, perfectly competitive marketplaces look different than they do in the short run. Al...
Q: Use the information in the table below to calculate the value of the marginal product of labor (VMPĻ...
A: Value of marginal product of labor = Price * Marginal product of labor L MPL P VMPL 1 24 5 120 ...
Q: The chief executive of the cafe chain Sweetwaters Coffee & Tea, said that because buying a cup of co...
A: The elasticity of demand refers to a change in the quantity demanded due to a change in its price. T...
Q: List and explain 3 factors of the wheat boom? List the benefits of the railways and explain how can ...
A: ▪︎The term "wheat boom" refers to the substantial growth in wheat production and exports that occurr...
Q: 3. Consider the following functions for Good X (pieces) per week: Demand Function: Qd = 60 – 2P Supp...
A: Price elasticity of demand is the ratio of the percentage change in quantity demanded of a product t...
Q: When would you expect cyclical unemployment to be rising? Falling?
A: Unemployment is a situation in which a person who is willing and able (capable) to work do not find ...
Q: What term describes the remaining level of unemployment that occurs even when the economy is healthy...
A: Unemployment means people are actively looking for job but they are not able to find the job at prev...
Q: Economic development must be analyzed by the overall social system like cultural traditions, attitud...
A: Economic growth is the rise in an economy's production of goods and services. The rise in capital go...
Q: Consider a closed economy with consumption, production, and government. The representative consumer ...
A: A closed economy is one in which one country is absolutely independent in terms of production and ha...
Q: The web resources in this unit explored the economic relationship between China and Africa and the i...
A: According to Chinese statistics, China has become the continent's greatest trading partner, with Afr...
Q: 3) Joint Ownership and Contracts A firm is jointly owned by Juan and Roda. The firm's production fun...
A: Given , Cost of effort for Juan = Cost of effort for Roda = 2 Price of output = 2 Production funct...
Q: The Russia-Ukraine War: Discuss the effects of this war on international trades and businesses
A: The conflict appears to be Europe's most serious conflict since 1945.
Q: What is globalization in contemporary world? What is globalization in simple words? What is the impo...
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a...
Q: For a 20-year geometric cash flow progression increasing at 2% per year, the first-year amount is P1...
A: Introduction: Cash flow is outlined because the net amount money|of money} and cash equivalents goin...
Q: . Consider allocations b-f (meaning points a, b, and f). Which allocations(s) A. are better for Ross...
A: When an allocation makes at least one individual better off without making another individual worse ...
Q: There are three national economic goals: economic growth, full employment, and price stability. For ...
A: Fiscal policy refers to the policy of the government to control the money supply in the economy. Und...
Q: 5 What are the two rules for writing that were most interesting or important to you and why? Add two...
A: The two most important rules in writing for me is:- Number 1) Whenever you write anything whether an...
Q: Find the EAR in each of the cases. Use 365 days a year- Do not round intermediate calculations and r...
A: Given APR 8%, 16, 12, 15 compounded as quarterly, monthly, daily, infinitely. To calculate:- EAR=? P...
Q: Explain why you think that maintaining a well functioning financial system is important and suggest ...
A: By collecting and combining cash from multiple sources, financial systems enable the transfer of sav...
Q: a. The Covid-19 pandemic has signifigantly effect the economy around the world and the suitable poli...
A: Aggregate Demand and Supply The total quantity of demand for goods and services created in the entir...
Q: Economic History of North America ) Discuss the role of the Hudson Bay Company in the fur trade?
A: In the British realm, the Hudson's Bay Company was founded in 1670. For the most of its history, HBC...
Q: When Marx writes of labour and its values, he focusses on socially necessary labour. why?
A: Socially necessary labour In Marx's criticism of political economics, socially necessary labor time ...
Q: Now consider the economy in the steady state: The steady state is defined as a point in the long run...
A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If y...
Q: - Draw an AS-AD model of an economy dealing with an inflationary gap. What is one iscal policy that ...
A: Inflationary Gap:- An inflationary can be explained as the disparity between the present actual GDP ...
Q: If we found that one manufacturer of televisions constantly was the first to announce any change in ...
A: It is an example of price leadership. because Price leadership describes a situation in which a domi...
Q: Essay (6-8 sentences, please): Define and contrast the 4 forms of capitalism 1. Neoliberal market ca...
A: 1) Neoliberal market capitalism:- Neoliberalism is a strategy program that integrates political econ...
Step by step
Solved in 2 steps
- You are evaluating the possibility that your company bids $150,000 for a particular construction job. (a) If a bid of $150,000 corresponds to a relative bid of 1.20, what is the dollar profit that your company would make from winning the job with this bid? Show your work. (b) Calculate an estimate of the expected profit of the bid of $150,000 for this job. Assume that, historically, 55 percent of the bids of an average bidder for this type of job would exceed the bid ratio of 1.20. Assume also that you are bidding against three other construction companies. Show your work.Prospect Y = ($6, 0.25 ; $15, 0.75) If Will's utility of wealth function is given by u(x)=x0.25, what is the value of CE(Y) for Will? (In other words, what is Will's certainty equivalent for prospect Y?) (The certainty equivalent represents the maximum amount a person would be willing to pay to acquire a risky prospect, and equivalently, the lowest price for which they would be willing to sell a risky prospect if they already owned it) (Note: The answer may not be a whole number; please round to the nearest hundredth) (Note: The numbers may change between questions, so read carefully)Suppose that the buyers do not know the quality of any particular bicycle for sale, but the sellers do knowthe quality of the bike they sell. The price at which a bike is traded is determined by demand and supply.Each buyer wants at most one bicycle.(ii) Assuming that each buyer purchases a bike only if its expected quality is higher than the price,and each seller is willing to sell their bike only if the price exceeds their valuation, what is theequilibrium outcome in this market?
- an entrepreneur is setting up a storage facility which will provide storage bothat peak times and off peak times.The entrepreneur need to decide how much money storage Q1 t to supply at peak times, and how much storage Q2 to supply off peakit also needs to decide how to set up capacity K, where capacity is such that both K is equal or plus Q1 and K is equal or plus Q2The peak period demand fan storage is given by PI=7200 -Q1 and the off peak is give by P2=5400 -Q2 where P1 and P2 are the prices for units of storage at peak times and off peak respectively.the variable cost is 200 per unit of storage supplied and capacity costs are 100 per unit. Hence profits fpr the entrepreneurs are given by:(7200-Q1) Q1+ (5400-Q2) Q2 - 200 (Q1+Q2)-100 K where Q1 is less or equal K and Q2 is less or equal Ka) write down the Kuhn-Tucken conditions for this proble. b) Find the optimal outputs and capacity for this problemc) now suppose there is a substancial increqse in capacity costs, which rise to 2000…Suppose there are lemon (used) cars worth every price from ZMW1,000 to ZMW3000 to new owners, with each price equally likely. Further you expect that a car worth X to a new owner is worth 0.75X to its current owner. Suppose that there is a finite supply of cars at each price, while there is a much larger number of potential buyers (so the equilibrium price is the valuation of the potential buyer). Lastly assume that the quality of the car is unknown to potential buyers, due to information asymmetry. (a) Calculate the equilibrium price and average quality of cars sold. (b) Which cars are sold and which ones are not? (c) Is the equilibrium efficient?The HR department is trying to fill a vacantposition for a job with a small talent pool. Validapplications arrive every week or so, and theapplicants all seem to bring different levels ofexpertise. For each applicant, the HR managergathers information by trying to verify variousclaims on resumes, but some doubt about fitalways lingers when a decision to hire or not isto be made. What are the Type I and II decision error costs? Which decision error is more likely tobe discovered by the CEO? How does this affectthe HR manager’s hiring decisions?
- Consider a medieval Italian merchant who is a risk averse expected utility maximiser. Their wealth will beequal to y if their ship returns safely from Asia loaded with the finest silk. If the ship sinks, their incomewill be y − L. The chance of a safe return is 50%. Now suppose that there are two identical merchants, A and B, who are both risk averse expected utilitymaximisers with utility of income given by u(y) = ln y. The income of each merchant will be 8 if theirown ship returns and 2 if it sinks. As previously, the probability of a safe return is 50% for each ship.However, with probability p ≤ 1/2 both ships will return safely. With the same probability p both willsink. Finally, with the remaining probability, only one ship will return safely.(iv) Compute the increase in the utility of each merchant that they could achieve from pooling theirincomes (as a function of p). How does the benefit of pooling depend on the probability p? Explainintuitively why this is the case.You and a coworker are assigned a team project on which your likelihood or a promotion will be decidedon. It is now the night before the project is due and neither has yet to start it. You both want toreceive a promotion next year, but you both also want to go to your company’s holiday party that night.Each of you wants to maximize his or her own happiness (likelihood of a promotion and mingling withyour colleagues “on the company’s dime”). If you both work, you deliver an outstanding presentation.If you both go to the party, your presentation is mediocre. If one parties and the other works, yourpresentation is above average. Partying increases happiness by 25 units. Working on the project addszero units to happiness. Happiness is also affected by your chance of a promotion, which is depends on howgood your project is. An outstanding presentation gives 40 units of happiness to each of you; an aboveaverage presentation gives 30 units of happiness; a mediocre presentation gives 10 units…If Firm 1 chooses to release the console in October with probability of 0.692 or December with a probability of 0.308, then Firm 2 is indifferent between choosing a release date. If Firm 2 released the console in October with probability of 0.50 or December with a probability of 0.50, then Firm 1 is indifferent between choosing a release date Suppose now that instead of choosing the release date at the same time, the firms choose sequentially (but still in advance). Firm A chooses its release date first, then firm B observes that date and chooses its own date. Thepayoffs are otherwise the same as above. Represent the game tree corresponding to this dynamic game.
- Assume Person A is offered the following game: If they want to participate in the game, theywill need to pay £5. If they participate, they can choose between Option A and Option B.Option A consists of spinning a roulette wheel with 37 different numbers (18 red, 18 black,and 1 green). If the outcome is red, the participant receives £10 and £0 otherwise. Option B isa fair coin flip that yields £5 when heads comes up and £10 when tails comes up.(a) What is the expected value of Option A?(ii) What is the expected value of Option B?(iii) What is the expected value of participating in the game and choosingOption A?(iv) What is the expected value of participating in the game and choosingOption B?(v) How much would the game need to cost to make it a fair game when youchoose Option A?(vi) How much would the game need to cost to make it a fair game when youchoose Option B?(b) Person A chooses to participate in the above described game. Which of thefollowing options can be true regarding…Suppose Martha earns an of income 400 Birr currently, and her utility function is given by: U(m) = 4m, where m represents income. She has two options: Option 1: to buy a share. If she is successful her income will be 700 Birr and if she is not successful her income will be 100 Birr. Option 2: to do nothing and keep on earning 400 Birr. Assuming that success and failure are equally likely, a) What would be her expected income if she buys the share? b) What would be her expected utility of buying the share? c) Would Martha buy the share? Why? and Is Martha risk averse, risk lover or risk neutral?Suppose that the University of Alabama and Clemson are making spending decisions for theupcoming year. Assume that Alabama is currently spending $15 million on their recruiting andfacilities, and Clemson is spending $10 million. Each team has an additional $5 million to spendor keep as profits. If they both choose to not spend the additional $5 million then Alabama hasa 60% chance of getting the highest quality quarterback recruit to commit to them (getting thecommitment of the player is the goal). However, if they both choose to spend the additional $5million then there is a 57% chance that Alabama gets the high quality quarterback to commit. IfAlabama spends the additional $5 million but Clemson doesn’t then there is a 67% chanceAlabama gets the recruit. However, if Alabama does NOT spend the additional $5million butClemson does then there is a 50% change either team gets the recruit’s commitment. Setup thepayoff matrix and label the players, their strategies, and their payoffs, and…