Q: If the ulitity function is: U=15x₁ + 58x2 and considering the following bundles: A=(67,47) B=(22,82)…
A: Utility:The utility is want satisfying power of a commodity. It can be expressed in cardinal and…
Q: Price of X P1 P2 P3 I A. 0. B. Q3 Q5. Q1 OC. Q2Q4. D. Q1Q3. E. Q1Q5. T Q2 Q3 Q4 25 Quantity of X…
A: The government imposes minimum and maximum price to protect the consumer and producers in a rise in…
Q: Table 1 shows the financial position of the Smithville Bank once $4025.00 has been deposited. Assume…
A: Total Deposits = $4025Total Reserves = $4025Required Reserve Ratio = 8.00% or 0.08
Q: Quantity Total Cost 32 4 5 6 7 260 300 380 480 600 Average Marginal Total Cost Cost 86.67 75.00…
A: Perfect competition is a market form with a high number of buyers and a high number of sellers.…
Q: The textbook considers the extension of the Ricardian model to more than two goods - let's consider…
A: This model is an economic theory that explains international trade (IT) based on comparative…
Q: Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with…
A: The concept of P.W. can be explained as a financial concept used to evaluate the value of future…
Q: Equality
A: Equality refers to the kingdom of being identical, fair, or just, mainly in the distribution of…
Q: If income increases by 10% and, in response , the quantity of housing demanded increases by 7%, then…
A: The elasticity of demand:Elasticity is defined as the responsiveness to change in one variable. When…
Q: 1. The primary purpose of a central bank is to control a nation’s:___________. 2. The Fed’s…
A: The macroeconomic terrain encompasses the comprehensive economic situation of a nation or locality,…
Q: A scientist claims that 7% of viruses are airborne. If the scientist is accurate, what is the…
A: The objective of this question is to find the probability that the proportion of airborne viruses in…
Q: The Hull Petroleum Company and Inverted V are retail gasoline franchises that compete in a local…
A: In a Bertrand oligopoly, firms determine prices (not quantity) independently to maximize profits.…
Q: 2. Suppose the firm is producing using q = f(KL) = (3/2)K^(1/3) L^(2/3) where q = a firm's output, K…
A: MRTS is rate at which one factor of production is decreased in order to maintain the same level of…
Q: 6. Who should pay the tax? The following graph gives the labor market for laboratory aides in the…
A: Here we have to findout the Demand-supply equilibrium.Demand-supply and equilibrium: An individual's…
Q: Suppose that in a week the price of spaghetti sauce increases from $5.00 to $5.50 per jar. At the…
A: The quantity demanded of a good or service and its price movements can be measured by using…
Q: Based on the graph, the resulting consumer and producer surplus at a price of $25 are, respectively,…
A: Consumers surplus is the difference between the highest price a consumer is willing to pay and the…
Q: Consider the extensive game with 3 players from before. Assume that all players have the exact same…
A: An extensive game with 3 players. All players have the same payoff. The payoff is determined…
Q: (where b The maximum value of the monetary policy multiplier is implies sensitivity of planned…
A: This can be explained as the use, utilization, or exp. of resources, commodities or services by…
Q: Refer to Figure 6-10. What is the price buyers will pay after the tax is imposed" a. $8.00 O b.…
A: Tax is an essential payment that is made to the authorities for the intake of goods and offerings…
Q: Central Bank
A: The working and decision of central bank changes as the economic situation changes in a nation.…
Q: Suppose that at market equilibrium, the marginal private benefit is $47 and the marginal social…
A: Deadweight loss represents the inefficiency in a market when the quantity produced is different from…
Q: 4. Laffer Curve In the 1980s, President Reagan based his tax and spending policies on supply side…
A: The tax revenue is given as The increase in the tax rate, the workers prefer leisure over…
Q: At first, Jeff's optimal bundle is A. After a decrease in the price of X, Jeff, whose preferences…
A: Consumer preferences refer to the subjective tastes, desires, and priorities that individuals have…
Q: Recently, some members of Congress have proposed a law that would make price stability the sole goal…
A: Expansionary monetary policy stimulates aggregate demand. In case of recessions, expansionary…
Q: A certain task can be performed by the executive, working alone, in 4 hours. If he delegates the…
A: Costs can be categorized into fixed costs (remain constant regardless of production levels) and…
Q: What would the combination of a young population, high birthrates, and lower socioeconomic status…
A: The term "Hispanic" refers to individuals with cultural ties to Spain or Spanish-speaking countries,…
Q: 5. Agricultural export subsidies in a small nation The following graph shows the market for wheat in…
A: An export subsidy is a payment to the exporting firm by the government of the exporting country to…
Q: 12. Weighted average of probabilities is classified as A. average rate of return B. expected rate of…
A: Rate of return:It is the rate that an investor on this amount of investment receives. It is…
Q: the players have the same set of actions, i.e. A₁ = A2, and payoffs are sym- metric: u₁(a1, a2)…
A: Nash equilibrium is a concept in game theory that describes a situation in which each participant in…
Q: a) Fiscal policy
A: The problem is to identify the type of economic policy represented by a government initiative that…
Q: b. If the economy is at point C, what is the (opportunity) cost of 2 more automobiles? What is the…
A: A production potential frontier (PPF), which is used to describe the associated trade-offs and…
Q: Refer to the accompanying graphs for a competitive market in the short run. What will happen in the…
A: A perfectly competitive market is one in which a big number of enterprises sell similar products to…
Q: What did the McKinnon and Shaw predict about the movements of interest rates once financial markets…
A: Financial concealment insinuates measures by councils to channel resources for themselves as a form…
Q: An island economy produces only bananas and coconuts. The table gives the quantities produced and…
A: Nominal GDP (Gross Domestic Product) refers to the total value of all final goods and services…
Q: Assume the current equilibrium level of income is $200 billion as compared to the full-employment…
A: Aggregate expenditure (AE) refers to the total amount of spending in an economy over a specific…
Q: The graph shows the supply curve of smart watches and the market price of a smart watch. Draw the…
A: The problem is to identify the producer surplus in the given graph, which shows the supply curve of…
Q: 6. Beer and Wine are substitutes, favorable weather in California has produced a good harvest grapes…
A: The objective of the question is to understand the impact of an increase in the supply of wine (due…
Q: Suppose an economy's real GDP is $31,500 in year 1 and $33,000 in year 2. The population is 110 in…
A: The real GDP is $31500 in the year 1.The real GDP is $33000 is year 2. The population is 110 in the…
Q: per-unit price c¡¡ for product
A: The boss asks you to purchase bi units of product i for each i in a set P of products. You decide to…
Q: How would the equilibrium price (P) and equilibrium quantity (Q) for a good be affected if there was…
A: When there is a simultaneous increase in demand and a decrease in supply for a good, the effect on…
Q: a) A fixed exchange rate is preferable to a flexible exchange rate because aggregate economic…
A: Since you have posted two independent McQs, according to the guidelines, only the first McQ is…
Q: Flour is an input in the production of cupcakes. If you don't know anything about the demand curve,…
A: In the context of the production of cupcakes, flour is considered an input. The law of supply…
Q: am. 104.
A: The issue we're endeavoring to tackle is to identify the group(s) that are probably going to help…
Q: What is the difference between a change in quantity supply and a change in supply?
A: Understanding the breaking point between a "differentiation through and through gave" and a…
Q: At a hotel property, if foxed costs run at $690,000 and variable costs are typically 45% of…
A: The objective of the question is to calculate the profit of a hotel property given the fixed costs,…
Q: 3. Assume you have $20 to spend on food and clothing. The price of a unit of food is $10 and the…
A: The budget line shows the different combinations of two goods that a consumer can consume given the…
Q: Suppose there exist two imaginary countries, Sequoia and Yosemite. Their labor forces are each…
A: Opportunity cost is the units of a good forgone to produce an additional unit of another good.A…
Q: X and X2 are the two factors used in production. Afirm's production function: fcx₁, x₂) = max {X₁,…
A: The link between the quantity of producing factors, such as labor and capital used, and the amount…
Q: The table below shows national income and imports. The level of exports is fixed at $350. All…
A: The exchange of commodities/products, services, money, and ideas across international borders is…
Q: Illustrate and explain the relationship between inflation and unemployment
A: When people in a nation are able to work and actively seek employment but are unable to find it,…
Q: Babydrink is a monopolist due to its patent in infant formula. The total cost for production in…
A: Monopoly refers to market where the only single firm exists in the market. single firm is price…
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.
Step by step
Solved in 3 steps with 11 images
- Solve the following problem using an excel spreadsheet. A tobacco company isinterested in hiring a salesperson to promote smoking cigarettes in nightclubs. The position pays a flat salary of $50,000, regardless of sales levels. The firm has two applicants, Predictable Patty and Risky Ricky. Predictable Patty can produce with 100% certainty $100,000 a year in sales. Risky Ricky, on the other hand, can produce $300,000 with probability of 50%. But if he turns out to spend his time drinking and dancing in the nightclubs instead of making sales, he could actually cost the firm -$100,000 per year.a) During their first year on the job, what are the expected sales of Patty and Ricky? What are the firm’s expected profits on each worker?b) Now assume both workers are currently 25, and they will work until the retirement age of 65. The firm has the option to fire its new employee after one year based on sales, but can only hire one employee. Assume that it takes only one year to discover whether…A Bank has foreclosed on a home mortgage and is selling the house at auction. There are two bidders for the house, Zeke and Heidi. The bank does not know the willingness to pay of these three bidders for the house, but on the basis of its previous experience, the bank believes that each of these bidders has a probability of 1/3 of valuing it at $800,000, a probability of 1/3 of valuing at $600,000, and a probability of 1/3 of valuing it at $300,000. The bank believes that these probabilities are independent among buyers. If the bank sells the house by means of a second- bidder, sealed-bid auction, what will be the bank’s expected revenue from the sale? The answer is 455, 556. Please show the steps in details thank you!Portsmouth Bank has foreclosed on a home mortgage and is selling the house at auction. There are three bidders for the house, Emily, Anna, and Olga. Portsmouth Bank does not know the willingness to pay of these three bidders for the house, but on the basis of its previous experience, the bank believes that each of these bidders has a probability of 1/3 of valuing it at $600,000, a probability of 1/3 of valuing at $500,000, and a probability of 1/3 of valuing it at $200,000. Portsmouth Bank believes that these probabilities are independent among buyers. If Portsmouth Bank sells the house by means of a second- bidder, sealed- bid auction (Vicktey auction), what will be the bank's expected revenue from the sale?
- When a famous painting becomes available for sale, it is often known which museum or collector will be the likely winner. Yet, the auctioneer actively woos representatives of other museums that have no chance of winning to attend anyway. Suppose a piece of art has recently become available for sale and will be auctioned off to the highest bidder, with the winner paying an amount equal to the second highest bid. Assume that most collectors know that Valerie places a value of $15,000 on the art piece and that she values this art piece more than any other collector. Suppose that if no one else shows up, Valerie simply bids $15,000/2=$7,500 and wins the piece of art. The expected price paid by Valerie, with no other bidders present, is $________.. Suppose the owner of the artwork manages to recruit another bidder, Antonio, to the auction. Antonio is known to value the art piece at $12,000. The expected price paid by Valerie, given the presence of the second bidder Antonio, is $_______. .The table below shows that a sales agent can work with either low, or high amount of effort. Low effort generates$30,000, $60,000 or $100,000 profit (with probability given below), while high effort generates 60,000; 100,000 or 150, 000 (with probability given below) depending on some random factors. Bad luck (P=0.3) Medium luck (P=0.3) Good luck (P=0.4) Low effort (a=0) $30,000 $60,000 $100,000 High effort (a=1) $60,000 $100,000 $150,000 The cost of low effort is 0 and the cost of high effort is $10,000 (Formally, c=$10,000a). The net wage is wage minus cost of effort and the net profit is total profit minus wage. Suppose the firm offers the repair person a fixed wage of 13,000, what will be the net wage of the repair person and the net profit of the owner? Suppose now the owner offers the repair person the following bonus arrangement What will be the net wage of the repair person? What will be the net profit of the owner? Specify…Matthew is playing snooker (more difficult variant of pool) with his friend. He is not sure which strategy to choose for his next shot. He can try and pot a relatively difficult red ball (strategy R1), which he will pot with probability 0.4. If he pots it, he will have to play the black ball, which he will pot with probability 0.3. His second option (strategy R2) is to try and pot a relatively easy red, which he will pot with probability 0.7. If he pots it, he will have to play the blue ball, which he will pot with probability 0.6. His third option, (strategy R3) is to play safe, meaning not trying to pot any ball and give a difficult shot for his opponent to then make a foul, which will give Matthew 4 points with probability 0.5. If potted, the red balls are worth 1 point each, while the blue ball is worth 5 points, and the black ball 7 points. If he does not pot any ball, he gets 0 point. By using the EMV rule, which strategy should Matthew choose? And what is his expected…
- Suppose the equilibrium price for good quality used cars is $20,000. And the equilibrium price for poor quality used cars is $10,000. Assume a potential used car buyer has imperfect information as to the condition of any given used car. Assume this potential buyer believes the probability a given used car is good quality is .60 and the probability a given used car is low quality is .40. Assume the seller has perfect information on all cars in inventory. If the seller sells the buyer a poor quality car, what is the net-benefit to the seller? a. A net gain of $6,000. b. A net loss of $20,000. c. A net loss of $6,000. d. A net gain of $10,000.How much is his risk on any random day due to late arrival?A risk averse individual will always choose the safe but less profitable activity instead of the riskier but more profitable activity. True or False
- You have a 50 percent chance of making $0, a 40 percent chance of making $100, and a 10 percent chance of losing $100. Calculate the expected value and variance of the payoff.In the final round of a TV game show, contestants have a chance to increase their current winnings of $1 million dollars to $2 million dollars. If they are wrong, their prize is decreased to $500,000. The contestant thinks his guess will be right 50% of the time. Should he play? What is the lowest probability of a correct guess that would make playing profitable?First Fiddler's Bank has foreclosed on a home mortgage and is selling the house at auction. There are three bidders for the house, Ernie, Teresa, and Marilyn. First Fiddler's does not know the willingness to pay of these three bidders for the house, but on the basis of its previous experience, the bank believes that each of these bidders has a probability of 1/3 of valuing it at $600,000, a probability of 1/3 of valuing at $500,000, and a probability of 1/3 of valuing it at $200,000. First Fiddler's believes that these probabilities are in de pendent among buyers. If First Fiddler's sells the house by means of a second- bidder, sealed- bid auction (Vickrey auction), what will be the bank's expected revenue from the sale? (Choose the closest option.) The closest option is 448, 148. Please explain in details thank you.
