This payoff matrix represents the choices of two large universities in the Dallas area. The numbers represent profits and the first number is TCU and is in purple, the second number is SMU and is in red. SMU Raise tuiton Don'traise tuiton Raise tuiton 10, 10 12, 9 C U Don'traise tuiton 9, 11 7, 7 If the President of SMU promised not to raise tuition, what would TCU most likely do in response? raise tuition because the demand is inelastic appeal to anti-trust regulators to break a collusive agreement be nice to their students and keep tuition low only raise tuition if SMU breaks their promise not to raise tuition

This payoff matrix represents the choices of two large universities in the Dallas area. The numbers represent profits and the first number is TCU and is in purple, the second number is SMU and is in red. SMU Raise tuiton Don'traise tuiton Raise tuiton 10, 10 12, 9 C U Don'traise tuiton 9, 11 7, 7 If the President of SMU promised not to raise tuition, what would TCU most likely do in response? raise tuition because the demand is inelastic appeal to anti-trust regulators to break a collusive agreement be nice to their students and keep tuition low only raise tuition if SMU breaks their promise not to raise tuition

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

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Suppose the administration of a University that is located a high-crime urban area mustdecide on a policy to increase policing on its campus. The student population is 10,500 students but iscould increase if crime is reduced. The cost of added policing in terms of additional salary and equipmentis estimated to be $2.4 million per year. Suppose the administration plans to make their decision with thehelp of a benefit cost analysis of the policy. VSL is $11.8 million a. Explain how the concept of Value of a Statistical Life might factor into a benefit cost analysis of thispolicy. b. How many lives would need to be save to justify the added policing costs if only prevented deathswere considered as the policy benefit? c. Suppose it is believed that student enrollment will increase in the future if crime on campus is reduced.Write a formula to calculate the present value of benefits of policing if student enrollment increases by4% each year.
In the movie Rebel Without a Cause, James Dean and Buzz Gunderson compete for thefavours of sixteen year old Judy. Buzz's gang members steal two cars. The group of teenagers gathers on aLos Angeles lookout, with a cliff that drops down to the Pacific Ocean. James and Buzz are to drive the stolencars toward the cliff. The first person to jump from his car is declared the chicken (which is bad). The lastperson to jump is the hero (which is good), capturing Judy's affection and the gang's respect. The driverlesscars continue over the cliff and plunge to the rocks at its base.Each driver can make two possible actions. Jump when he feels endangered (be a chicken) or jump AFTERthe other driver jumps (be a rooster). Assuming that both feel endangered at the same moment, the followingmatrix represents the payoffs for James and Buzz for each choice of strategy.BuzzChicken RoosterJames Chicken 3, 3 -10, 20Rooster 20, -10 -50, -50 PLEASE ANSWER THE BELOW QUESTION WITH REFERECE TO THE ABOVE…
Two athletes of equal ability are competing for aprize of $10,000. Each is deciding whether to takea dangerous performance-enhancing drug. If oneathlete takes the drug and the other does not, the onewho takes the drug wins the prize. If both or neithertake the drug, they tie and split the prize. Taking thedrug imposes health risks that are equivalent to a lossof X dollars.QuickQuiz Answers1. d 2. c 3. a 4. d 5. c 6. b 7. d 8. ba. Draw a 2×2 payoff matrix describing the decisionsthe athletes face.b. For what X is taking the drug the Nashequilibrium?c. Does making the drug safer (that is, lowering X)make the athletes better or worse off? Explain.
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…
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Suppose Simon Petrikov decides to stop trying to capture princesses. This new policy will put Jake and Finn – who rescue princesses for a living – out of business, costing them a combined $100. However, Lumpy Space Princess and Princess Bubblegum each gain $75 from this new turn of events, as they save money in precautions. Simon’s new policy is: A. Pareto optimal B. Welfare-reducing C. Potentially Pareto improving/Kaldor-Hicks efficient D. Only Potentially Pareto improving/Kaldor-Hicks efficient if LSP and Bubblegum give Jake and Finn at least $100
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Please no written by hand solution A local KFC franchisee is evaluating the number of fried chickens to produce each day. The following table shows the 4 alternatives, the states of nature and their payoffs Daily Supply 40 50 60 70 Daily Demand 40 $80 $0 -$80 -$160 50 $80 $100 $20 -$60 60 $80 $100 $120 $40 70 $80 $100 $120 $140 What would your decision be if the following rules are applied? (show your calculation) Maximax Maximin La Place Minimax-regret