Given the demand of computer P=100-5Q and cost function C= 100+2Q2, MC=0 tell us what in terms of profit maximization under monopoly
Given P=a-bQ and MC= c show that dp/dc= 0.5
Differentiate between price taker and price maker with examples
Given MC=6 demand function in 1st market segment and P1= 24-Q1 and in 2nd market segment P2= 12-0.5Q2
Find π max0, Q1, P1, Q2, P2,
Suppose these markets were no longer separated. How would you construct the market demand in this situation? Would the monopolist’s profit maximizing single price still be 12?
In perfect cartel, do firms play a best response to each other’s quantities? if not in which direction would they like to change their output. What does this say about stability of cartels?
Suppose Paul’s preferences over his income can be represented by a
NMUF µ:;XX where X is Paul’s income in 1000 euros. In his current job he earns 50,000 euro/year. He is offered a job that pays him 64000euro or 36000 with equal probability. Is Paul willing to change job?
Suppose the preferences of some person can be represented by an EUF with NMUF µ(x)=√x suppose the person has initial wealth x0=1000 and he holds a lottery that gives him additional gain and losses =0.5(1000)+0.5(-1000) how much would that person be willing to pay for insurance against losses?
What is the risk premium for this lottery?
Given labor demand Ld=C-dw and labor supply Ls=a-bw
Determine the equilibrium W*
Assume that worker derive a benefit K in monetary value from government mandate to increase W by T
Ld=c-d(w+t), Ls=a+b(w+k)
Find the new W*
What is effect of K=0 on labor supply side
Use the following data to find pm and pw
Worker’s options
Work
(pw)
Shirk
(1-pw)
Manager’s options
Monitor
(pm)
W:1
M:-1
W: -1
M:1
Don’t monitor
(1-pm)
W: -1
M:1
W:1
M:-1
Consider the following games:
L
C
R
U
9.4
3.3
5.2
M
5.8
8.8
3.7
D
4.1
6.6
2.9
Determine the pure strategy Nash equilibria
Is there an equilibrium in dominant strategies?
Are there strategies that survive iterated elimination of dominated strategies?
Which of the Nash equilibria should be chosen?
Consider the following game:
L
R
U
a,v
b,s
D
c,t
d,u
Find the values for a, b, c, d, v, s, t, u such that the game corresponds to a prisoner dilemma
What relationships between the pay offs have to be satisfied for the game a prisoner dilemma?
Marry pays 5000 at the end of every month to a bank as loan repayment the interest rate of 10% compounded monthly and t=4 months. Find the present value?
If john saves 10000 every semester in a bank a/c which pays 10%. How much will he redeem after 1.5 years compounded semiannually at the end of semester
Given worker with 8h shift where each hours of efforts produces 3 widgets(production) the price rate of one widget produced is 5
Given the previous U (s, m) =s1/3m2/3 find the hours of shirking and income
Given the following lotteries:
U()=0.5(16)+0.1(25)+0.3(81)+0.1(121)
U(µ)=0.3(20) +0.3(15) +0.4(25)
Calculate EU(), EU(µ), Ce(), Ce(µ), R(
For the people:
U1(x)=√x
U2(X)=ln(x)