- Assume city budget is $50,000, Police $20. Pfice $10. Feds offer 1:1 match up to 100 fire units. Using indifference curves show a situation where the city increases the purchase of fire units by exactly 100 units.
Q: Suppose a person receives a 9% increase in pay when inflation is 8%. In this case, the nominal…
A: Answer: Given, Increase in pay = 9% Inflation = 8% An increase in pay is a nominal increase. Thus…
Q: 13. Other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in: A.…
A: Other things being equal the benefit cost risk trade.
Q: What are the 3 basic economic problems? Briefly
A: An economic problem is one that arises as a consequence of a scarcity of resources and requires…
Q: Given the production function per hour Q(x, y) = −2x² − 4y² + 40 + 40y, where x is a worker…
A: Here we have:- Qx,y=-2x2-4y2+40x+40y In this situation:- x is a worker who receives $1 per hour and…
Q: Define the term substitute goods. Please explain in details.
A: In economics, goods are things that fulfill human needs and offer utility, such as a customer buying…
Q: 3. Average Fixed Cost is the a. horizontal distance (at any particular cost level) between ATC and…
A: A company's total cost is divided into fixed and variable costs. A "fixed cost" remains constant…
Q: Imagine you are a senior statistician with a national statistical agency. The economists who work…
A: Gross domestic product (GDP) refers to the entire market value of the products and services…
Q: s monopolistic competition efficient? pose that a firm produces wool jackets in a monopolistically…
A: When there are numerous companies selling similar but distinct products in a given market,…
Q: Consider an economy which is in general equilibrium. Ann and Bob are the only) two consumers in an…
A: In an economy, it is given that Ann and Bob are the only two consumers.
Q: Consider the problem of a consumer who must choose between two types of goods, good 1 (2₁) and good…
A: Given function U=X1+X2Price of X1= P1Price of X2=P2Consumers income=M
Q: 8. According to the graph below, suppose there are two economies Switzerland and Thailand. Both…
A: External economies of scale refers to the situation when an economy produces a good at a lower…
Q: When rent controls exist, supply exceeds demand. quantity supplied exceeds quantity demanded. demand…
A: Rent control is a government policy that limits how much a landlord can charge for renting a…
Q: Consider two policies, a tax cut that lasts for only 2 years and a tax cut that is expected to be…
A: Sol:- Since the short or the long run effect of a tax cut policy depends on the value of output…
Q: What is quantitative easing
A: In economics, quantitative easing refers to the part of the Central Bank's action when it decides to…
Q: A new bridge with an infinite life is expected to have a first cost of $ 59.1 million. It will have…
A: Recognizing the Annual Cost Equivalent (EAC) Aside from capital planning, equivalent annual cost…
Q: = 5√K and has a capital Country A produces GDP according to the following equation: GDP stock of…
A: The calculation of the total final value of all the products and services produced within the…
Q: Consider a market with the following kinked inverse demand P=20-3g for q ≤ 3 and P=14-g for q>3. A…
A: Given demand functions P=20-3q---- when q<=3 P=14-q--- when q>3 Marginal Cost=m
Q: When interest rates in the U.S. increase, we could expect: Multiple Choice more foreigners…
A: Foreign investors gain considerable ownership stakes in domestic enterprises and assets due to these…
Q: A country has a Cobb-Douglas production function given by: Y = AK0.5 0.3 If total factor…
A: Since you have asked multiple questions, we will solve first question you. If you want any other…
Q: Ann, Bob, in an appart Ann plays the sne plays, nappier she is. Bob likes to read. plays the drums,…
A: A negative externality / external cost are a type of spillover which imposes a cost on the third…
Q: ppose we shopped for a basket of goods in 2000 and it cost $350. Suppose the same basket of goods…
A:
Q: Figure 1 below shows the cross-country correlation between the development of the education system…
A: In the above diagram, there is an upward sloping curve which shows the highly positive correlation…
Q: The accompanying table gives data for a commercial bank or thrift. If the legal reserve ratio falls…
A: Reserve ratio is the mandatory holding that the banks in the country should hold. It is the…
Q: 1) Large current account deficits imply large financial account surpluses. True Or False? Explain.…
A: International economics is involved with the consequences of global variations in effective sources…
Q: Use the information for Economy Z to answer the question below. Year 2017 2018 $50,741 $55.129…
A: Consumer price index measures the cost of market basket of goods and services purchased by a…
Q: Question 2: (a) Compare and contrast monopolistic competition and perfect competition market…
A: Since you have asked multiple questions, we will solve first question for you. In case you want any…
Q: Labor Capital (machines) Technique (hours) A 10 35 B 25 25 C 10 60 D 30 20 sing the data in the…
A: Labor and capital are the variable inputs that are used in production of good. The table shows the…
Q: Price and Cost (dollars) w 60 65 + N A 10 20 a. $5.00. b. $4.00 c. $2.00. 30 d. $6.00 MC 40 50 60 70…
A: The graph shows that the demand curve is horizontal. So the market is perfectly competitive. Firms…
Q: Provide specific real life example (Quanti and quali data) for equilibrium prices and quantity
A: Demand and supply are two market forces which determine the price and quantity level . Market…
Q: This is the third time. please answer correctly. A characteristic NOT found in a group disability…
A: Group Disability Income Policy If an employee is unable to work for a certain amount of time due to…
Q: In the Solow growth model, if investment is less than depreciation, the capital stock will will…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Problem 4 Note: Unexplained answers will NOT be graded An han estated the demand eption of a certain…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…
Q: 6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of…
A: Introduction The reason behind the upward sloping of aggregate supply curve is sticky price. The…
Q: employee who owns an individual Disability Income policy is injured in an automobile accident and…
A: The term disability income (DI) insurance alludes to an insurance policy that turns out revenue to…
Q: b) What is the difference between nominal interest rate and real interest rate? Does the central…
A: The nominal interest rate is the interest rate which is calculated without taking in account the…
Q: Suppose that the shoe market begins in equilibrium, and that its supply and demand is given by: $12…
A: When the government distributes money to consumers or producers through a subsidy, it might be…
Q: In the following game table representing airfare pricing between Delta and Jet Blue, what is the…
A: Nash Equilibrium refers to the best course of action of a firm provided the strategy or course of…
Q: Which of the following is not correct about Fasten? O A. If Uber decides to own self-driving cars to…
A: Fasten is a new ridesharing start-up in Boston, entered the market in September 2015, hoping that…
Q: Determine whether each of the following statements about human resources and economic growth in…
A: Economic growth is an increase in the production of goods and services in an economy. Increases in…
Q: For a Binomial Distribution with n=3, p=0.6 where p is the probability assigned to the success event…
A: As given Random variable follow the Binomial Distribution with n = 3 and p = 0.6 X ~ Bin(n,p) Where…
Q: Use the information for Economy Z to answer the question below. In which year did Economy Z have…
A: CPI measures the change in cost of market basket of goods and services.
Q: Economic Decision Making) Write a 100 to 150 - word response to one of the following questions :…
A: Privatization is the peculiarity of governments contracting exclusive, revenue driven organizations…
Q: The demand curve for bottled water is Qd = 200-P and the supply curve is Qs=2P-100. What is the…
A: Market equilibrium is the point where demand and supply curve intersects with eachother.
Q: When a firm faces a downward-sloping individual demand for its product, which of the followi true?…
A: Demand curve shows the negative relationship between price and quantity demanded of a good.
Q: If a discouraged worker reenters the labor force and begins searching for jobs but doesn't find one,…
A: Labor force is the sum of the employed people and unemployed people who are actively seeking for job…
Q: A firm has SC and LC functions graphed below. In a new figure plot the corresponding SMC, SAC, LM…
A: The LMC curve is basically determined as the change in the LRTCs as the level of the output is…
Q: Guitars 100 25 75 100 50 Ukuleles In the above figure, the opportunity cost of moving from producing…
A: The next best alternative is frequently referred to as opportunity cost. It's also known as the…
Q: In the SARB buys and sells certain financial assets like treasury bills and government bonds in the…
A: Monetary policy refers to the actions undertaken by a nation’s central bank to regulate the cash…
Q: Describe Heckscher-Ohlin Theorem. 11:55 PM ✓ 0₁ Message
A:
Step by step
Solved in 2 steps
- Scenario 2 Tess and Lex earn $40,000 per year and all earnings are spent on consumption (c). Tess and Lex both have the utility function (sqrt c) . Both could experience an adverse event that results in earnings of $0 per year. Tess has a 1% chance of experiencing an adverse event and Lex has a 12% chance of experiencing an adverse event. Tess and Lex are both aware of their risk of an adverse event. Refer to Scenario 2 If an insurance company knows the probability of Tess experiencing an adverse event, what is the actuarially fair premium charged to Tess per $1 of benefit? Round to two decimal placesConsider an individual whose utility function over income I is U(I), where U is increasing smoothly in I (U’ > 0) and convex (U’’ > 0). a) Draw a utility function in U - I space that fits this description. b) Explain the connection between U’’ and risk aversion.⚫ Lottery A gives $2 million with 10%, $1 million with 80%, and $0 with 10%. ⚫ Lottery B gives $2 million with 12%, $1 million with 6%, and $0 with 82%. ⚫ Lottery C gives $2 million with 40%, $1 million with 20%, and $0 with 40%. ⚫ Lottery D gives $2 million with 3%, $1 million with 24%, and $0 with 73%. Show one example of preference relations which violate Independence of the expected utility theorem, and explain the reason.
- Diluted Happiness: Consider a relationship between a bartender and a customer. The bartender serves bourbon to the customer and chooses x ∈ [0, 1], which is the proportion of bourbon in the drink served, while 1− x is the proportion of water. The cost of supplying such a drink (standard 4-ounce glass) is cx, where c > 0. The customer, without knowing x, decides on whether or not to buy the drink at the market price p. If he buys the drink his payoff is vx − p, and the bartender’s payoff is p − cx. Assume that v>c and all payoffs are common knowledge. If the customer does not buy the drink he gets 0 and the bartender gets −cx. Because the customer has some experience, once the drink is bought and he tastes it, he learns the value of x, but this is only after he pays for the drink. a. Find all the Nash equilibria of this game. b. Now assume that the customer is visiting town for 10 days, and this “bar game” will be played on each of the 10 evenings that the customer is in town.…Diluted Happiness: Consider a relationship between a bartender and a customer. The bartender serves bourbon to the customer and chooses x ∈ [0, 1], which is the proportion of bourbon in the drink served, while 1− x is the proportion of water. The cost of supplying such a drink (standard 4-ounce glass) is cx, where c > 0. The customer, without knowing x, decides on whether or not to buy the drink at the market price p. If he buys the drink his payoff is vx − p, and the bartender’s payoff is p − cx. Assume that v>c and all payoffs are common knowledge. If the customer does not buy the drink he gets 0 and the bartender gets −cx. Because the customer has some experience, once the drink is bought and he tastes it, he learns the value of x, but this is only after he pays for the drink. a. Find all the Nash equilibria of this game. b. Now assume that the customer is a local, and the players perceive the game as repeated infinitely many times. Assume that each player tries to maximize…Scenario 2 Tess and Lex earn $40,000 per year and all earnings are spent on consumption (c). Tess and Lex both have the utility function ( sqrt c) . Both could experience an adverse event that results in earnings of $0 per year. Tess has a 1% chance of experiencing an adverse event and Lex has a 12% chance of experiencing an adverse event. Tess and Lex are both aware of their risk of an adverse event. Refer to Scenario 2 Calculate Lex’s and Tess' expected utilities without insurance. (each one separated) Round to two decimal places for both
- The value of a successful project is $420,000; the probabilities of success are 1/2 with good supervision and 1/4 without. The manager is risk neutral, not risk averse as in the text, so his expected utility equals his expected income minus his disutility of effort. He can get other jobs paying $90,000, and his disutility for exerting the extra effort for good supervision on your project is $100,000. (a) Show that inducing high effort would require the firm to offer a compensation scheme with a negative base salary; that is, if the project fails, the manager pays the firm an amount stipulated in the scheme. (b) How might a negative base salary be implemented in reality? (c) Show that if a negative base salary is not feasible, then the firm does better to settle for the low-pay, low-effort situation.how then can we find the total utility given q1=24, q2=30 and q3=15Suppose that you graduate from college next year and you have two career options: 1) You will start a job in an investment bank paying a $100,000 annual salary. 2) You will start a Ph.D. in economics and, as a student, you will receive a $20,000 salary. You are bad with decisions, so you are letting a friend of yours decide for you by flipping a coin. The probabilities of options 1 and 2 are, therefore, each 50%. a) Illustrate, using indifference curves, your preferences regarding consumption choices in the two different states of the world. Assume that you are risk-averse. [Include also the 45 degrees line in your figure] b) Now show how the indifference curves would change if you were substantially more risk averse than before. Explain. c) Now show the indifference curves if you are risk neutral and if you are risk loving. d) Show your expected utility preferences from point a) mathematically.
- Roger's utility/u as a function of wealth/w is u = { ln w, w < 1600 w1/2, w >= 1600 Roger has $1000 and 3 options. 1. spend $400 to enter the game with probabilities of winning or losing: Win/(Lose) (500) 0 1000 3000 P(Win/(Lose)) 0.2 0.1 0.6 0.1 a. Show with workings which option roger would choose.***PLEASE NOTE: QUESTION HAS TWO PARTS REQUIRING ANSWER*** Q: Johnny Football has a utility function of the form ? = √?. Johnny is beginning his senior year of college football. If he is not seriously injured, he will receive a $1,000,000 contract for playing professional football. If any injury ends his football career, he will take a job as a refuse removal facilitator in his hometown that pays $10,000. There is a 10% chance that Johnny will be injured badly enough to end his career. a. What is Johnny’s expected utility? b. How much would Johnny be willing to pay to remove the financial riskhe faces? That is, what $p would he pay for a $1,000,000 insurancepolicy so that he would have $1,000,000-$p even if he had a seriousinjury? Assume he wouldn’t work for $10,000 if he had the insuranceand he was injured. Hint: You should set his utility with certainty(U($1,000,000-$p)) equal to his expected utility with risk (found inpart a) and solve for p.If utility is given by U(x, y) = x2 + y2 and px = 2, py = 3, I = 50, this person will choose: a. (10, 10). b. (15, 6.67). c. (25, 0). d. (0, 50/3).