a) Is (A, B) a separating or pooling equilibrium? b) Suppose the economy has 90% low risk types and 10% high risk types. Draw the average zero profit line. c) What happens to the contract (A, B)? Explain why.
Q: which of the following assumptions is TRUE? A. The demand is known exactly and is constant over time...
A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If y...
Q: Macroeconomists are interested in two types of phenomena: economic growth and business cycles. Expla...
A: Macroeconomists are interested in two types of phenomena: economic growth and business cycles. This ...
Q: Finding the Economic Life of the NewCNC Machine. Find TC and EUAC for each year.
A: ANSWER The economic life of the the defender is often 1 year so a proper analysis may be between d...
Q: Assume a Ricardian, constant-cost world. There are two countries, the United States and Canada. Each...
A: The Ricardian model implies that two nations produce two things using just one element of the produc...
Q: QUESTION 2 An increase in the nominal GDP by 6% can correspond to a decrease in real GDP by 3% and a...
A: The total market price of all product and services generated during a country's economy over a parti...
Q: Classify each of the statements as an example of positive or normative analysis.. The sugar quota in...
A: The sugar quota in the United States costs consumers $6.08 billion a year. Correct Answer: Positive ...
Q: A simultaneous increase in taxes and increase in government spending would result to the following:
A: Increase in taxes causes the aggregate demand to shift to the left. Increase in Government spending ...
Q: Which of the following are exam. The town of Sprohm lowers living. Save The Queen, an armorer Kupopo...
A: Most individuals would define "organised chaos" as a complex situation or process that appears chaot...
Q: 11. An amount of P 250,000 is now deposited into a savings account that earns 12% compounded continu...
A: Given: Initial amount=P250,000 Interest rate=12% compounded continuously Number of years=5 Withdrawa...
Q: A company issued 50 bonds of P 1,000.00 face value each, redeemable at par at the ends of 15 years t...
A: Given: A company issued 50 bonds of = P1,000 face value each Redeemable at par at the end of = 15 ye...
Q: According to the Keynesian framework, ____________ in _______________ may cause inflation, but not a...
A: Inflation usually means rise in prices and and recession is such a period where less demand are seen...
Q: Compare and contrast natural resources and natural capital
A: Resources: An asset is an actual material that people need and worth like land, air, and water. Asse...
Q: Calculate the average cost (LCOE) of power generated by a nuclear plant which costs $8000/kw and has...
A:
Q: At 1% interest rate, how much should you invest today to be able to withdraw ₱ 3,053 annually for 8 ...
A: 1% interest rate is given monthly , where he withdraw 3053 annually for 8years . And payment is done...
Q: draw a general demand curve and label it D. Then shift the curve to the left or the right depending ...
A: The demand curve shows the association between the amounts of commodity demanded by the consumer at ...
Q: Question 8 Total Utility Oranges Marginal Utility Total Utility Oranges Marginal Utility Lemons Quan...
A: Marginal utility refers to an additional utility with one more unit of good or service consumed.
Q: . A manufacturing company purchased electrical services for the next 5 years to be paid for with $70...
A:
Q: If the consumer’s income is held constant, how would the prices of goods X and Y have to change to m...
A: A consumer can consume more of a commodity in two ways: either, his overall income increases - whic...
Q: Use the timeline to calculate the value of the annuities i=7%. 6 5 4 3 (1) - (3) 3 4 lo (1) .value a...
A:
Q: Country X is a major oil exporter. It has a floating exchange rate system and has managed to maintai...
A: Given that: Floating exchange rate system fall in oil prices- from $100 a barrel to $29 a barrel
Q: Using the table in Question 6, what was Fruitland's nominal GDP in year 2? Answer:
A: The economics as a study is basically based upon the idea of scarcity, or the limit to amount of res...
Q: discuss in detail the nature of production, profit and costs within the public sector
A: The influence of government revenue, expenditure, and investment decisions is studied in public sect...
Q: Give examples of the government intervention in Organic View and in Mechanistic View.
A: Government intervention is regulatory action taken by Govt. that seek to change the decisions made b...
Q: The following graph shows the market for cereal in Chicago, where there are over 1,000 stores that s...
A:
Q: Table 29-4 Bank of Pleasantville Assets Liabilities Reserves $3,000 Deposits $50,000 Loans 47,000...
A: The money provide is that the total quantity of currency and different quick assets in a very countr...
Q: If a marketplace produces $40 in consumer surplus and $20 in producer surplus and has a deadweight l...
A: Given Producer surplus after price control is $20 and consumer surplus is $40. Deadweight loss due ...
Q: A ₱ 26,823 debt is to be paid off in eight equal quarterly payments at 3% compounded quarterly. What...
A: Given: The debt amount is = ₱ 26,823 The interest rate is = 3% compounded quarterly The payments are...
Q: A firm has the following revenue and cost functions. TR = 120 Q – Q2 TC = Q2 +30 Q + 10 Determin...
A:
Q: Enumerate at least five interpretations of the graph of the Marginal Utility curve
A: Marginal Utility refers to the additional utility derived from the consumption of an additional unit...
Q: When a rational individual elects to save a portion of his/her disposable income then what does that...
A: Disposable income is the amount of money available to an individual or household to spend or save af...
Q: As government keep raising tax rate (t) on buyers, government will continually collect higher tax re...
A: The government influences the amount of discretionary income available to households by raising or l...
Q: 8. A machine has a first cost of P200,000 with a scrap value of P25,000 at the end of Its economic I...
A: The double declining balance depreciation (DDB) method, also known as the reducing balance method, i...
Q: Suppose the Central bank announces today a change in monetary policy: it is increasing target inflat...
A: People will create their expectations about what will be happening in the future based on what has r...
Q: Since 1789 the overall trend has been greater power for the states at the expense of the Federal gov...
A: Federalism in the United States has evolved over time, from obvious power distinctions between natio...
Q: Suppose the the demand function is p(z) = (51 – 3z) (for z < 17). %3D A. What is the marginal price ...
A: Demand function shows the functional relationship between Quantity demanded for a commodity and its ...
Q: Evaluate the following statements: e. "I hate golf, but I paid so much for the clubs that I can't g...
A: Profit maximizing output is where marginal revenue is equal to marginal cost.
Q: 8. Shifts in supply or demand I The following graph shows the market for donuts in Chicago, where th...
A: Answer: If the government issues a $1,000 move-in-vouchers then more people will come to Chicago. Si...
Q: Suppose the demand curve for a product is Q = 60/P. Compute the quantity demanded at prices of $1...
A: A demand curve is a graph in economics that depicts the relationship between the price of a commodit...
Q: If this consumer has $13.00 to spend on cans of beer and slices of pizza in any given week, then wha...
A: Answer: A consumer maximizes his/her utility where the following conditions are satisfied: MUBeerPBe...
Q: Which of the graph/s below show/s a rise in the price of fish? Fish (pounds per year) Fish (pounds p...
A: Chicken and Fish are substitutes. If the price of chicken increases, the demand for fish will increa...
Q: Suppose that initially the money supply is $1 trillion, the price level equals 3, the real GDP is $5...
A: Here we calculate the new price level after the increases in money supply by using the given informa...
Q: You are the manager of College Co required by the local university. Ov. is not the only firm that bu...
A: Every one of the monopolistic competitive firm would follow its benefit expanding condition independ...
Q: a) State two advantages of the "orthogonal least square (OLS)' method in respect to the "forward sel...
A: This chapter is related to linear equation. It is attractive because it is simple and easy to handle...
Q: Suppose that a consumer cannot vary hours of work as he or she chooses. In particular, he or she mus...
A: Unemployment insurance is the compensation given to people who are not working until they get the wo...
Q: A computer machine initially worth P 50,000 depreciates in value each year by 20% of its value at th...
A: Given : Initial price=P50,000 rate=-20%(depreciating) time=9 yrs. Formula used : Final price ...
Q: urer produces a pair of shoes at a labor cost of P 9.00 a pair and a material cost of P 8.00 a pair....
A: Given Fixed charges = 90000 Variable cost = 4 Selling price = 30 per unit Labor cost = 9 Material co...
Q: Financial managers should consider this when improving the financials of the firm A. that the overa...
A: Financial managers are professionals who look after financial health of the company.
Q: Supply of construction workers in a small town is given by Qs = 4W- 20, and demand for construction ...
A: Given information: Qs = 4W- 20 (Supply of construction worker) Qd 100-2W (demand for construction wo...
Q: 6. Individual and market supply Suppose that Carlos and Deborah are the only suppliers of pizza slic...
A: Answer: Market demand: market supply refers to the sum total of individual supplies. Price (Doll...
Q: Why does taking a drug off a formulary increase the prices to the consumer?
A: At the marketplace, there are many pharmaceutical companies that make their medicines using differen...
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
- Use the figure below to answer the following question. Let In represent Income when health, let Is represent income when ill. Let E[I] represent expected income. Point D represents Utility Is у в an actuarially fair and full contract an actuarially fair and partial contract X E[1], the utility from Expected income with no insurance an actuarially unfair and full contract an actuarially unfair and partial contract с IH U(I) PromeEconomics Explain in detail how you would extend the Cox- Ross{Rubinstein binomial tree model for pricing options if instead of considering two states of nature in each period you consider three states of nature (e.g. a good state, a middle state and a bad state). Focus on a tree with two periods (periods 0, 1 and 2) and draw the corresponging trinomial tree.What is the outcome of the Stolper-Samuelson Theorem??? Account for lessons derived and offer appropriate policy recommendations.
- Consider an insurance contract with the premium r=$200 and payout q=$800. a.) John has healthy-state income IH = $900 and sick-state income IS = $100. He has a probability of illness p = 0.2. Is the contract fair and/or full for John? b.) What is John’s expected income without this insurance contract? What is John’s expected income with this insurance contract?6. Consider an insurance contract with the premium r=$200 and payout q=$800. a.) John has healthy-state income I = $900 and sick-state income I, = $100. He has probability of illness p = 0.2. Is the contract fair and/or full for John? b.) What is John's expected income without this insurance contract? What is John's expected income with this insurance contract?ASAP Suppose that Elizabeth has income of £100 but there is a chance of 1/3 that she may lose 80 of that in a car accident. What are the states of nature? Represent the graph of the contingent commodities and show her endowment point. Suppose that she is risk averse and that she can buy insurance at a premium of 0.5 per unit of cover. Show the fair odds line and her indifference curves on the graph. Can you say anything about the amount of cover she will buy?
- Suppose that 20 risk neutral competitors participate in a rent seeking game with a fixed prize of $500. Each player may invest as much money as he wishes in the political contest. The probability of winning is directly proportional to the candidate's share of the total rent-seeking investment. 1. What is the expected net benefit of a player if all other players invest $20 each? Write the net benefit as a function of the player's investment. 2. Solve the maximization problem to arrive at the profit-maximizing investment. Round to the nearest cent.5. A tax on healthy people. Consider the basic Rothschild-Stiglitz model with asymmetric information and robust and frail customers. a. Suppose the government imposes a Wellness Tax τ > 0, on robust and frail types but collects on this tax only when they are healthy (that is, there is no tax if they turn out to be sick). Will a separating equilibrium still be possible? Draw a version of the Rothschild-Stiglitz diagram to support your answer. b. Will a separating equilibrium be possible if the tax τ > 0, is imposed on all customers in both sick and healthy states? Again, support your answer graphically.Consider an insurance contract with the premium r=$200 and payout q=$800. a.) John has healthy-state income IH = $900 and sick-state income IS = $100. He has probability of illness p = 0.2. Is the contract fair and/or full for John? What is John’s expected income WITHOUT this insurance contract? What is John’s expected income WITH this insurance contract?
- Assume that Alabama starts mandating all insurance companies to cover all expenses for any psychological testing for people covered by health insurance policies. Discuss what happens to premiums in the next cycle and beyond. Make sure to describe any assumptions necessary to conduct your analysis.3. A risk-neutral principal hires an agent to work on a project at wage w. The agent's utility function is: v(w)-g(e), where v(w)= Jw and g(e)=e/2 The agent can choose one of two possible effort levels, e¡ = 4 or e, = 6 . If the agent chooses effort level e, = 4 the project yields 100 with probability 1/4 and 0 with probability 3/4. If he chooses e, = 6 the project yields 100 with probability ½ and 0 with probability ½. The reservation utility of the agent is 0. (a) Suppose the effort level chosen by the agent is observable by the principal. Find the contract chosen by the principal. Show graphically in terms of contingent utilities v(w,00) and v(w.)Which of the following is true about utility-income model? The individual prefers an uncertain outcome to a certain one with the same expected income The individual prefers the utility she would get from her expected income to the expected utility she will get from the uncertain income The individual is risk tolerant All of the above