In DD model, suppose r=0.3 and R=4. A bank collects all 100 potatoes from individual HHs and make storage/investment decision collectively. Optimally, the bank should storage ____ potatoes and invest the rest.
Q: Use the filtering model to determine the number of high quality (H) and low quality (L) homes at…
A: Filter theory refers to the theory of elucidating attraction. It was proposed by Davies and Kerchoff…
Q: 6. For classical decomposition, which moving average order produces smoother trend? A. MA 2 B. MA 3…
A: Answer - "Thank you for submitting the questions, But, we are authorized to solve one question…
Q: In Diamond Dybvig (DD) model of bank run, each person is either an early type, or a late type, with…
A: Answer-
Q: Consider an equation to explain salaries of CEOS in terms of annual firm sales, return on equity…
A: Since you have posted a question with multiple subparts. We will solve the first three sub-parts for…
Q: Let P(A) = 0.2, P(B) = 0.6 and P(A or B) = 0.5. Are events A and B mutually exclusive? Why or why…
A: Given: P(A) = 0.2, P(B) = 0.6 and P(A or B) = 0.5
Q: en is a predator-prey model with the following parameters: Carrying capacity 1000, regrowth rate of…
A: The state of equilibrium occurs when market supply and demand are matched, resulting in stable…
Q: What is meant by the tetm "random walk "? Under what conditions will consumption function follow…
A: The Random walk theory of consumption states that the consumption patterns of consumers cannot be…
Q: In the December, 1969, American Economic Review (pp. 886-896), Nathanial Leff reports the following…
A: Given information log S/Y = 7.3439 + 0.1596 log Y/N + 0.0254 log G - 1.3520 log D1 - 0.3990 log D2…
Q: Consider the model of investment under asymmetric information D=(1 + r)(1- W). Suppose that…
A:
Q: 4. In inventory control, the time which elapse between placing an order and the arrival of the…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Like the Beveridge model, there are no real cost controls in the Bismark model, therefore long…
A:
Q: What is a probit model vrs. a logit model?
A: Probit and Logit model are used when we need to predict or analyze the binary dependent variable.In…
Q: In a binomial interest rate tree model, assume that the six-month rate process starts on date 0 (=0)…
A: Introduction Initially the price of 6 month is 0 and after 6 month it will either increases or…
Q: The Grossman model emphasizes the important roles that education, health knowledge, and expectations…
A: Grossman derives demand for health from an optimum control model in which health capital is both…
Q: In the two-period model, which equation represents the consumer's lifetime budget constraint? +c'…
A: In this question, we will derive the consumer lifetime budget constraint. Let period 1 consumption…
Q: Suppose that a high school student is preparing to take the SAT exam. Explain why his or her…
A: It's a variable whose values are determined by the results of a random event. Random variable,…
Q: With the help of a diagram explain the main principles of the first-order Markov Model. In your…
A: A markov model is the one that predicts the current or present probability of an event on the basis…
Q: What is a probit model?
A: The Probit model is used in a regression analysis where the dependent variable is dichotomous i.e.…
Q: “A risk-averse individual will always full insure, meaning that uncertainty is irrelevant.” Discuss…
A: Risk: It refers to the situation that can cause benefit and loss to a person. The person who is…
Q: Neuroeconomics attributes time-inconsistency to (A) high levels of the oxytocin hormone; (B) the…
A:
Q: What is a logit model?
A: A Logit Model is the binomial regression model, better known as Logistic Regression. Using logistic…
Q: The usefulness of a model is determined by whether it yields usable predictions for the real world.…
A: A model is defined as the simple version of the real world. These models help us understand the…
Q: Write TRUE if the statement is true and FALSE if it is not. 1. Volatility of the financial…
A: 1. Historical volatility gauges the fluctuations of underlying securities by measuring of changes in…
Q: QUESTION 38 What are the two routes that we use to process information, according to the Elaboration…
A: Question 38 The answer is - Central & peripheral
Q: There are four key relationships upon which the Standard Model is based. Please list each of the…
A: When economic agents take part in the production process, they get an income in exchange for labour.…
Q: [True/False] Let a, b and c represent constants, and X, Y and Z represent random variables. If…
A: A random variable is a mathematical portrayal of the result of a measurable examination. A random…
Q: Isabella understands that if she were to play golf, she would be able to spend time outdoors (where…
A: Expectancy theory is also known as expectancy theory of motivation and. Individual act as epr their…
Q: Carhart suggests a four factor model approach. Which of the following is not included in their…
A: Meaning of Financial Assets: The term financial assets refer to the situation, under which these…
Q: Indicate whether the statement is true or false, and justify your answer.Suppose an individual…
A: This is not an example of time-inconsistent preferences, because, time-inconsistent is the…
Q: Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking…
A: Meal Home Good Z Health H Total benefit (Z+H) Steak and eggs 9 -4 5 Kale salad and broccoli…
Q: Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking…
A: Utility refers to the situation where the total satisfaction derived from the consumption of goods…
Q: Suppose that you are interested in estimating the causal effect of X on Y; however, you are worried…
A: Making causal inferences regarding sensitive and unattainable mindful objects is difficult in the…
Q: If the combinationr-10% and Y-$200 billion is on the IS curve, we know that the combinationr-10% and…
A: b. the IS Curve shifting to the left
Q: what does the Baume model Show 2
A:
Q: Which one of the following statements about the modified Stackleberg model is correct? A. None…
A: Entry deterrent tactics could include obtaining trademarks on products and processes to raise entry…
Q: In contrast, FarmerBooks.com's (a competitor of OHaganBooks.com) stock were increasing at a…
A: The rate at which stock is increasing = r = 3.2% = 0.032 Time = t The initial value of stock (P) =…
Q: The usefulness of a model is determined by O whether it yields usable predictions for the real…
A: An economic model is a conceptual framework that represents economic procedures using a collection…
Q: 1. Write the system . 2. Find the exogenous and endogenous variables in the above model. 3. Solve…
A: A two-sector model and the government sector make up a three-sector model of income determination.…
Q: 1) Use the Lagrange-multiplier method to find the stationary values of z: a) z=xy, subject to x+2y=2…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Assume our standard model. Both Meb and Des have 5 hours. In an hour, Meb can knit 5 scarves or 4…
A: Meb has 5 hours so he can knit 3*5 = 15 scarves or 2*5 = 10 hats. Des has 5 hours so he can knit 4*5…
Q: True or False: One source of endogeneity in OLS models is from omitting a variable that belongs in…
A: One source of endogeneity in OLS models is from omitting a variable that belongs in the model. -…
Q: In the linear model, E(u) = %3D O A. unknown. Ов. B. a number close to zero but only with…
A: With n either being large or small, the predicted value of the error term has always been zero. The…
Q: An individual has a vNM utility function over money of u(x) Vx, where x is final wealth. She…
A: The utility function is a fundamental economic concept that measures preferences for a variety of…
In DD model, suppose r=0.3 and R=4. A bank collects all 100 potatoes from individual HHs and make storage/investment decision collectively. Optimally, the bank should storage ____ potatoes and invest the rest.
Step by step
Solved in 2 steps with 2 images
- An individual’s utility function is given as U (X) = X 0.5 where X represents the money, he has available for spending in a given time period. This individual has income of $225 in each time period and he discounts the future at the rate of 0.7. If he invests his up-front cost is 25 and his return in in the next time period is 35. a. Would this individual consider investing if his investment is financed by borrowing and cost of borrowing is 30%? (Consider two period model to justify your answer) b. Would this individual consider investing if his investment is financed by current savings? (Use two period model to justify your answer). c. Would this individual consider investing if his investment is financed by: $10 from current savings and rest of it from borrowing and the cost of borrowing is 30%? (Use two period model to justify your answer).9 Use the filtering model to determine the number of high quality (H) and low quality (L) homes at time t. Assume that there are a total of 2,000 homes in the community in time (t-1), of which 40% are high quality and the rest are low quality, the filtering rate is 0.03, and the retirement rate is 0.02QUESTION 6 Which one of the following statements about the modified Stackleberg model is correct? A. None of the other statements is correct. B. Entry accomodation is always more profitable than entry deterrence. C. Whether entry deterrence is more profitable than entry accomodation can depend on the size of the fixed cost. D. Entry deterrence is always more profitable than entry accomodation.
- What is meant by the tetm "random walk "? Under what conditions will consumption function follow such a behaviour?I. EOQ Model Suppose during your college life, every year you need $5,000 cash to spend in addition to the studying expenses. Each time in need of cash, you decide to go to the bank for that. And the transportation costsyou $5 (assumed amount) of going to the bank and coming back. Assume that the current saving/checking link account has an interest rate of 5%. Please find the optimal solution of the amount of cash each time for the withdraw.Consider a model of revolutions. Society is made up of N > 1 people. Simultaneously, each person chooses whether or not to participate. If n people participate, the probability the revolution succeeds is n/N. If the revolution succeeds, each member of society receives the benefits of a public good worth B. In addition, each person who participated in the revolution receives a benefit R if the revolution succeeds. (This extra benefit called a club good, might represent special access to government jobs for people who helped unseat the government once the new government is formed, or it might just represent an expressive benefit of participating in a victorious revolution.) The cost of participating is c > 0. Assume that R > cand that B + R < N × c. a. Suppose a player believes n other people will participate. What is her expected utility from participating? b. Suppose a player believes n other people will participate. What is her expected utility from not participating? (c)…
- Consider a model of revolutions. Society is made up of N > 1 people. Simultaneously, each person chooses whether or not to participate. If n people participate, the probability the revolution succeeds is n/N. If the revolution succeeds, each member of society receives the benefits of a public good worth B. In addition, each person who participated in the revolution receives a benefit R if the revolution succeeds. (This extra benefit called a club good, might represent special access to government jobs for people who helped unseat the government once the new government is formed, or it might just represent an expressive benefit of participating in a victorious revolution.) The cost of participating is c > 0. Assume that R > c and that B + R < N × c. (a) Write down a player’s best response correspondence. (b) Identify all of the pure strategy Nash equilibria of this game. (c) Calculate the utilitarian payoff associated with each equilibrium. (d) Does this game…Write down the two decision variables of a household or the two goods (including both market and non market goods) in one period RBC model.With the help of a diagram explain the main principles of the first-order Markov Model.In your answer explain any notation that you use. Explain what is meant by the term‘’first-order”.
- Determine the share (proportion) of person trips by each of two modes (Private auto and mass transit) using the multinomial logit model and given and following informationSuppose that the following binary dependent models. The model is based on the driving test of the 400 randomly selected driver’s license applicants. Y=1 if passed the test, or 0 otherwise, and X1 is years of experiences, X2 is the years of educations. Logit: P(Y=1/X) = F(0.563+ 0.040X1+ 0.057X2) What are the probabilities of passing the test for a person with 10 years of experiences and 10 years of educations in each model?Two differences between the prediction of the model with myopic agents and the predictions of the model with forward looking agents?