Q5 Suppose Eugene used to volunteer to cut his elderly neighbour's grass, but now his neighbour pays a company to do it.How does this change affect GDP?O It decreases GDP by the price of the serviceOIt decreases GDP by more than the price of the service.OIt increases GDP by less than the price of the service.It increases GDP by the price of the service.

Voluntary work is not included in the calculation of GDP. Eugene was volunteering so this will have…

Answered: Suppose Eugene used to volunteer to cut…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The research department at a manufacturing company has developed a new process that it believes will result in an improved product Management must decide whether to go ahead and market the new product. The new product may or may not be better than the old one. If the new product is better and the company decides to market it, sales should increase by $50,000. If it is not better and they replace the old product with the new product on the market, they will lose $24,000 to competitors. If they decide not to market the new product, they will lose a total of $30,000 if it is better and just research costs of $10,000 if it is not. Answer parts a through c below. (a) Prepare a payoff matrix. (Type an integer or decimal for each matrix element. Do not include the $ symbol in your answer.) (b) If management believes there is a probability of 0.4 that the new product is better, find the expected profits under each strategy and determine the best action. Select the correct answer below and fill…
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Suppose you are deciding whether you should go to college. If you go to college, you will pay $10,000 total in tuition, textbooks, and room and board every year for 4 years, with the first payment being made immediately and then the next three payments 1 year apart. Upon graduating, you expect to get a job earning $50,000 per year for the next 40 years. Assume that your first paycheck arrives exactly 1 year after you start working and you continue getting paid annually thereafter. Also assume that there are no raises in that particular field. If you do not go to college, you can start working immediately. The pay, however, is lower. You would expect to work for 44 years and earn $34,000 per year, with your first paycheck arriving exactly 1 year from now, and you continue getting paid annually thereafter. For the questions below, round all numbers to two decimals. Show Transcribed Text Part 1 (1 point) Assume the interest rate is 7%. If you were to attend college, the present value of…
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[Cheap Talk] Two players must decide whether to implement a project, which has gross value v E {0, 100, 200} to each player. Both players think each value is equally likely. Player 1 (the sender) learns the true value of the project. Then, he reports a value {high,medium,low} to player 2 (the decider), and player 2 decides whether or not to implement the project. If the project is not implemented, both players get zero. If a project with value v is implemented, payoffs are P1 : v – 75 P2 : – 125 (a) Show that there is no Perfect Bayesian Equilibrium (PBE) in which player 1 always reveals the true value to player 2. (b) Find a PBE in which player 1 reports "high" if the project is worth $200, "low" if the project is worth $0 (and either “low" or "high" when the project is worth $100, figure out which one works). (c) Find another PBE (or, if you believe there are no others, explain).

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