ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Online sale Suppose a student is considering selling their used smartphone online. They can sell it now for $p or wait and sell it next month for a different price. If they wait, they will receive a random offer with an equal probability of being either $300 or $100. The student can only receive one offer and cannot sell the phone after the second month. 1. Calculate the expected price in the next month. 2. Suppose that the current price p is equal to 200. (a) Give a reason why selling today could be a good idea. (b) Give a reason why selling next month could be a good idea.arrow_forwardBN10.2 Case: Jennifer is willing to Pay $300 to Insure against the Theft of a $8,000 Necklace. The Probability of Theft is 4%. Question: What is Jennifer's Risk Tolerance?arrow_forwardMalaysians are at their worst financial position in 2022 compared with the last five years, and thelooming recession may push them to the brink with dwindling savings coupled with theaftermath of the Covid-19 pandemic. A recent survey by Malaysian financial services websiteRinggitPlus revealed that 70 per cent of Malaysians saved less than RM500 per month (S$153)in 2022 or did not save at all. “This is compared with 52 per cent of Malaysians saving less thanRM500 monthly in 2021, the largest year-on-year increase since 2018,” the RinggitPlusMalaysian Financial Literacy Survey 2022 showed....Mr Patrick Tay, deals partner, economicsand policy at Malaysia PwC, is not surprised by the decline in savings in 2022. “One reason forthe depleted savings is low wages and higher inflation. But another key reason is that Malaysiansare spending more post-pandemic on holidays or other leisure expenses because some may feelthat they saved during the pandemic, and it is fine to now spend this year…arrow_forward
- Tesla Many analysts cite Tesla as the most innovative car company to enter the automobile industry in recent history. The company was founded in 2003 with the vision of being an independent automaker that would build affordable electric cars. Over the next 17 years, it produced five different car models and continues to introduce concepts for additional vehicles. It has also expanded into home battery and solar panel products. In the first half of 2020, 81% of electric vehicles sold were Teslas, and its affordable sedan, the Model 3, is the all-time bestselling electric vehicle ever. Tesla’s cars helped create a new market for electric vehicles. In addition, its cars have technological components that have advanced safety throughout the automobile industry. Its cars can come with self-driving capabilities and advanced safety warnings. Parts of these technologies have been adopted by other car makers. 1.Think about the automobile industry. Explain what type of market it is by answering…arrow_forwardNn3 Suppose an incumbent monopoly firm currently earns a profit of $50,000 per period. A potential entrant could enter and make a profit of $15,000 per period while also lowering the incumbent’s profit to $20,000 per period. The monopoly firm could seek to engage in predatory pricing, which would lead to both firms earning a loss of $5,000 per period. (a) Is there a Nash Equilibrium in this game? If so, what is it? (b) Discuss how this game might play out in the real world?arrow_forwardA couples house is $192,00 and their auto is $9,500. Assume that their home is now appraised at $200,000 and the value of their automobile has dropped to $8,700. Calculate and characterize the effects of these changes on their net worth.arrow_forward
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