= Cost of precaution, x ■ Accident harms, A(x) = 100 - x ■ Accident occurs with probability, p(x) = 1.01x Questions: 1. What is efficient precaution? leoni (loo-x) (1-0.0 (x)=.X. subseil (00-x-x+0₁0 (x² = x. 2. Suppose liability is imperfect and the polluter only held liable 90% of the time. What precaution, x, does the polluter take? 3. What precaution will firm take with a negligence rule that sets due care, xac = 70? 0.0 (x²-3x = 100.
Q: You are the manager of a monopolist that produces women shoes and faces a random marginal cost. The…
A: Monopoly refers to a market structure in which a single seller or producer of a good or service has…
Q: If the government wanted to reduce pollution from 16 units to 6 units, which of the following fees…
A: A firm will eliminate the pollution from their production process till the marginal cost to…
Q: You would like to have $800,000 in your retirement account in 40 years. You assume your retirement…
A: When individuals who have earned incomes have a separate account that they wish to save for the…
Q: One of your former peers starts up a firm after graduating. However, he didn’t take Markets so is…
A: In this scenario, a former peer has started a firm after graduating but is unsure if he is behaving…
Q: Sarah loans an amount from a bank and promise to pay at the end of 8 years and 5 months all her debt…
A: Given Debt amount at the end of 8 years and 5 months = 305,822. Nominal interest rate =10.115%…
Q: 17. Opportunity cost and production possibilities Van is a talented artist who sells hand-crafted…
A: Production possibilities frontier shows maximum combinations of two produced with the given…
Q: When is the firm operating in the short run and when does it operate in the long run? and Discuss…
A: In economics, the concepts of the short run and long run are used to analyze the time frames within…
Q: Which of the following is not included in GDP? Select one: a. the value of food people grow in their…
A: Gross Domestic Product (GDP) is a measure used to estimate the total value of all final goods and…
Q: The graph below depicts the impact of a tariff in the market for shoes. If a nation initially…
A: Taxes and quotas are both government policies that can be used to regulate trade in the…
Q: When countries trade with each other, does it result in a gain for everybody?
A: International trade alludes to the exchange of products and services across national boundaries. It…
Q: All else equal, which is steeper, the demand curve for a normal good or the demand curve for an…
A: In the case of a normal good, as income increases, the demand for the good also increases, but at a…
Q: The following graph plots daily cost curves for a firm operating in the competitive market for…
A: A perfectly competitive firm is a price taker, which means price in competitive market is determined…
Q: Which non-governmental or multinational organizations are active in Mexico?
A: Non-governmental organizations (NGOs) are private organizations that operate independently from…
Q: A buyer wants to purchase a house from a seller. Let v be the quality of this house. The quality v…
A: Buyers and sellers are individuals or entities that participate in the exchange of goods or services…
Q: Suppose that Ciana is deciding whether or not to buy a pair of sneakers that she has been…
A: Total cost is the sum of explicit cost and implicit cost. Explicit cost is out of pocket expenditure…
Q: Utilize the following graph of the medical doctor services market, in which there is a third-party…
A: The co-payment refers to the portion of the medical cost that a policyholder will be required to pay…
Q: WhatYouNeed is an online retailer with operations in Northern Indiana. Their network includes five…
A: To find the number of product types that will result in the lowest waste in the packaging line, we…
Q: Draw a graph showing a set of isoquants that depict capital and labor to be perfect complements (not…
A: The combination of more than one input, such as labor and capital, that can result in a specific…
Q: MR PD Smith has heard that the government has proposed the imposition of a maximum price or price…
A: An individual’s willingness to pay for each unit of the quantity he or she wishes to consume is…
Q: 3. How changes in the goods market affect the demand for labor This exercise examines the effect of…
A: Equilibrium in the market is reached at the intersection of demand and supply curves where quantity…
Q: Consider two possible public works projects: Project A and Project B. The costs and benefits of each…
A: Project A Project B Benefits Tall Citizens $170 $130 Short Citizens $150 $100 Costs…
Q: Scenario 15-1 A monopoly firm maximizes its profit by producing Q = 500 units of output. At that…
A: Total revenue is the product of price and quantity. Total revenue is calculated as the quantity…
Q: 7) Refer to Table 13.1. If a monopoly faces the demand schedule given in the table and has a…
A: A monopoly firm produces at MR = MC to maximize profit. So, at MR = MC, a monopoly firm maximizes…
Q: N = 10000, f = 0.75, S = 0.04, T = 150, G = 100, B rr = 0.1, = 1000, 0.5 = cr= 1. Calculate the…
A: Given, N = 10000 ; population s = 0.04; saivngs rate G = 100; government spending B = 1000; lump…
Q: Maureen only drinks a cup of coffee with one teaspoon of sugsr. In an indifference curve-budget line…
A: Indifference curve: It shows all the combinations of two goods that a consumer considers…
Q: A consumer has the following utility function: U(X,Y)= 400X2/5Y3/5 Suppose that the price of a spa…
A: To solve the above problem we construct Lagrangian in which Total cost function with constraint of…
Q: WAGE (Dollars per hour) 24 21 18 15 2 O 00 3 0 0 SIII++ -4 - Supply Demand 150 300 450 600 750 900…
A: At Equilibrium Wages, the quantity of labor demanded is equal to quantity of labor supplied. At this…
Q: 42 Which statement best describes the Federal Reserve System? A It was established in 1913 and…
A: A financial institution that manages and regulates a country’s monetary policy, issues currency,…
Q: In conducting an EVA analysis for year 2 for a newly introduced product line, Bethune, Inc., which…
A: EVA to be $28,000. After-tax interest rate of 14% Te of 22%. Initial investment - $505,000 3-year…
Q: 1. Compute the APL (average product of labor). 2. Compute the MPL (marginal product of labor). 3.…
A: An economic model that explains the connection between the amount of labor utilized throughout the…
Q: (Enter your At a price of $18 per CD, a firm sells 40 CDs. If the slope of the demand curve is -…
A: Marginal revenue is the revenue generated from the sale of an additional unit of output. Total…
Q: ou want $12,000 in your IRA in 6 years. Assuming you get 8% compounded quarterly, how much will you…
A: The future value in the individual retirement account should be $12000 Interest rate =8% compounded…
Q: Suppose that there are drastic technological improvements in shoe production at Home such that shoe…
A: Given the below data: For computers Payments to labor = WLC = 50 Payments to capital = RKC = 50…
Q: One of the important events in world trade in recent months has been the escalation of a trade war…
A: A trade war is what is going on where nations increment tariffs, portions, or other trade hindrances…
Q: Part a) A profit-maximizing monopoly's profit is equal to: a) P2 x Q3. b) (P2-P4) x Q3. c)…
A: Monopoly is the single seller in the market producing unique good.
Q: Which of these statements about liquidity traps is false? Firms are unlikely to undertake investment…
A: A liquidity trap refers to a situation in which the interest rates decrease to a certain lesser…
Q: Which event would shift short-run aggregate supply to the right? (a) A labor shortage puts upward…
A: The short-run aggregate supply (SRAS) curve represents the positive relationship between the price…
Q: Algebraically, solve for the after tax equilibrium price and quantity in the corn market, if the…
A: Given Linear demand function: Q=15.6-0.5p .....(1) Supply function: Q=9.6+0.25p…
Q: Critically discuss whether the emergence of cryptocurrencies can disrupt the fiat-based…
A: Cryptocurrency is a type of digital or virtual money that controls the creation of new units while…
Q: How relate with gdp can be reliable indicator of standard of living and use fiscal and monetary…
A: Macroeconomic aggregates are statistical indicators of a country's overall economic success. The…
Q: Refer to the information provided in Figure 13.3 below to answer the questions that follow. Price…
A: Marginal revenue is the additional revenue earned by selling one additional unit of output. It is…
Q: Many professional sports teams operate under a salary cap. This means that teams typically have a…
A: Opportunity Cost is the value of next best alternative foregone. In other words it is the potential…
Q: graph. Make sure to label the curves and axes clearly Calculate the value of the optimal Q and P.…
A:
Q: 1. Refer to the graph shown below. Which graph will lead to a lower real GDP and to pressure for a…
A: A lower GDP indicates that the economy is producing less than it could potentially produce in terms…
Q: National Income Data Spending Category Corporate profits Depreciation Gross private domestic…
A: Disposable income is total personal income minus current income taxes. In national accounts…
Q: Is inflation a progressive or regressive tax?
A: In a progressive tax system, individuals with a higher income pay a larger percentage of their…
Q: The Ajax Corporation owns a crane with an estimated remaining life of 10 years. The crane can now be…
A: For comparing the two investments , we will need to do the present value analysis of both the…
Q: When confronted with rational expectations regarding changes in monetary policy, the short-run…
A: The Phillips curve is used to show the relationship between inflation and unemployment. In short run…
Q: Suppose the reader has an old car, which is a gas guzzler. It is 10 years old and could sell for…
A: We have given the following information: Old car New Car Market value at present $400 8000…
Q: Provide a trend analysis for income taxes ratios. What does it mean when a company's income taxes…
A: The above question pertains to public finance, that pertains to the role of the government in the…
Please no written by hand solutions
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
- 8) Three decision makers have assessed utilities for the problem whose payoff table appearsbelow.s1 s2 s3d1 500 100 -400d2 200 150 100d3 -100 200 300probability.2 .6 .2Indifference Probability for PersonPayoff A B C300 .95 .68 .45200 .94 .64 .32150 .91 .62 .28100 .89 .60 .22-100 .75 .45 .10a. Plot the utility function for each decision maker.b. Characterize each decision maker's attitude toward risk.c. Which decision will each person prefer?Determine whether or not to stock a large supply of steel. There is uncertainty in the price of steel. Based on past history the following data are available Price (future) Prob (Price) PW if stocked PW if not stocked High 0.3 100000 0 Medium 0.5 -10000 0 Low 0.2 -50000 0 What is the probability that stocking steel will result in a negative present worth (PW)?An estate agent advertises its houses in two media; Daily Graphic and Ghanaian Times. The agent believes that there is a relationship between the sales S and the amounts spent on the two advertising media. The relationship is given by; where, d is the amount spent in Daily Graphic and g is the amount spent in Ghanaian Times. The estate’s agent fee is 12½% and this includes the cost of adverting. If the agent has planned to spend only 200 thousand Ghana Cedis on advertisement, show how it should be allocated between the two media in order to maximize net profit.
- 80. Gridiron University is a private university. A successful alumnus has recently donated $1,000,000 to Gridiron for the purpose of funding a "center for the study of sports ethics." This donation is condi- tional upon the university raising matching funds within the next 12 months. The university administra- tors estimate that they have 50% chance of raising the additional money. How should this donation be ac- counted for? a. As a temporarily restricted support. b. As unrestricted support. c. As a refundable advance. d. As a memorandum entry reported in the footnotes.955,000 30 se0,000 15. Jay Seago is suing the manufacturer of his car for $3.5 million because of a defect that he believes caused him to have an accident. The accident kept him out of work for a year. The company has offered him a settlement of 5700,000, of which Jay would receive $600,000 after attorneys' fees. His attorney has advised him that he has a 50% chance of winning his case If he loses, he will incur attomeys' fees and court costs of $75,000. If he wins, he is not guaranteed his full requested settlement. His attorney believes that there is a 50% chance he could receive the full settlement, in which case Jay would realize $2 million after his attomey takes her cut, and a 50% chance that the jury will award him a lesser amount of $1 million, of which Jay would get $500,000. Using decision tree analysis, decide whether Jay should proceed with his lawsuit against the manufacturer.Q3/ The probability that a consumer will rate a new antipollution device for cars What are the probabilities that it will rate the device (a) very poor, poor, fair, or good; (b) good, very good, or excellent? Rate Poor Fair Very good Excellent Very poor Good Probability 0.07 0.12 0.17 0.32 0.21 0.11
- (8 points) A taxpayer (of a particular profile) can either comply with the IRS code, orcheat and receive some benefit. The IRS can either audit the taxpayer at a cost or donothing. If the taxpayer cheats and the IRS audits then the tax payer faces penalty (fineplus possibly jail time) and the IRS receives the fine. The payoff matrix:IRSAudit (q) Not Audit (1-q)Cheat (p) -50000, 4000 1000, 0Tax PayerComply (1-p) -500, -300 0, 0Assume the tax payer cheats with probability p and complies with probability 1 − p, andIRS audits with probability q and does not audit with probability 1 − q. Find the mixedstrategy Nash equilibrium. Express probabilities in percentage forms and keep two digitsafter the decimal point, for example p = 2.34%.2. Airtight Manufacturing produces plastic cases that utility companies buy to protect electronic components on utility poles from weather damage. (a) The protective case currently used by utility companies has a 0.045 probability of cracking or breaking in any given year. When a protective case cracks or breaks, the utility company incurs a $800 expense to replace the case. What is the expected value of the utility company’s repair costs per protective case? Show your work. (b) Airtight has recently developed a stronger material for its protective case. The use of this stronger material reduces the case’s probability of cracking or breaking and serves as a differentiating factor for estimating this product’s VTC. Use the product-needs matrix described in the course to classify this differentiating factor. What type of product characteristic is it? What type of customer need does it satisfy? Justify your answers. (c) If this stronger material enables Airtight’s new protective…Assume you are faced with two decision alternatives and two states of nature whose profit payoff table is shown below. Decision Alternative State of Nature 1 State of Nature 2 Decision 1 25 30 Decision 2 45 15 The probability of state of nature 1 is 0.4.(a) Compute the expected value of each alternative.(b) Which decision is the optimal decision?(c) Compute the expected value with perfect information.(d) Compute the expected value of perfect information.
- 1 Consider the two investments listed below with possible outcomes and probabilities: INVESTMENT (in $1000) P SAFE RISKY INVESTMENT AMOUNT 40+ 40+ GOOD SCENARIO OUTCOME 45+ 80+ AVERAGE+ SCENARIO PROB+ OUTCOME 0.40+ 0.40 42+ 45 BAD+ SCENARIO PROB OUTCOME PROB 0.20 35+ 0.20 10 0.40€ 0.40 a) What are the expected payoffs (E(x)) and standard deviations for each investment? b) Suppose I have utility function U(*) = √(x). What is the expected utility from each investment? c) Which investment will I choose, if any? Show and explain your work and provide the intuition.< d) What is the value of the risk premium for the SAFE investment? Show and explain your work and provide the intuition. e) What is the value of the risk premium for the RISKY investment? Show and explain your work and provide the intuition.< 43 A ✔ →25 Y 20 15 10 5 B3, 0 B2 B1 0 12 13 C 13 b 12 5 05. Point (c) compared to point (b) 10 GD 15 (a) represents a higher level of utility. (b) represents the same level of utility, but is less expensive. (c) represents a higher level of utility and is less expensive. (d) represents a lower level of utility but is less expensive. (e) none of the above. 20 L 11 XEconomics The trust game is a two player game with three stages, often used in economics exper- iments to measure trust and trustworthiness. Player 1 starts off with 10 Dollars. She can send an amouh 0 SI S 10 to player 2. The experimenter triples the sent amount such that player 2 receives 3r. Player 2 can then send an amount 0SEE MORE QUESTIONS