Category: Economics

Part 1
What are implicit costs?
Part 2
An implicit cost is
Part 3
A.
a cost that changes as output changes.
B.
a cost that remains constant as output changes.
C.
a nonmonetary opportunity cost.
D.
the highest-valued alternative that must be given up to engage in an activity.
E.
a cost incurred in the long run.
Part 4
How are implicit costs different from explicit costs?
Part 5
A.
An explicit cost is a cost that involves spending money, while an implicit cost is a nonmonetary cost.
B.
An explicit cost is not an opportunity cost, while an implicit cost is an opportunity cost.
C.
An explicit cost is a cost incurred in the short run, while an implicit cost is a cost incurred in the long run.
D.
An explicit cost is a cost incurred holding output constant, while an implicit cost is a cost incurred as output changes.
E.
Both a and b.

Topic: Analytical Game Theory
Table 10.4 Nash equilibrium exercises (a) (b) (c)
Find all the Nash equilibria for the games in the three tables above. Complete this for each game (a), (b), and (c). Player 1 can choose U or D. Player 2 can play L, M or R.
Draw the payoff matrix for the game ‘rock-paper-scissors’. Suppose that a win gives you 1 utile, a tie 0 utiles, and a loss -1 utiles.
For this game, using the payoff matrix you created, are there any unique pure strategy Nash equilibrium? What are they?
2 Topic: Behavioral Game Theory
For the payoffs in the prisoner’s dilemma above, solve the Nash Equilibrium with the following pure strategies:Table 11.2 Prisoners’ dilemma (in dollar terms)(a) Two egoists: U(x,y)=x2(b) Two utilitarians: U(x,y)=x2+y2(c) Two enviers: U(x,y)=x2-y2(d) Two Rawlsians: U(x,y)=min(x2,y2)

Task 3
Consider the following Cobb-Douglas production function: q=AL^aK^b. Use the Lagrangian method to derive the cost minimizing capital-labor ratio, K/L (Hint: See Solved Problem 7.4).
B. Derive the optimal quantities of labor (L) and capital (K) as a function of the output q and factor prices (w and r). (Hint: To do so, utilize your result from part (a) in the third first-order condition of your cost minimization problem.)
Davis # 4
Task 4
A. Use your results from Task 3 to derive the long-run cost function of the firm as a function of output level q (Hint: See Solved Problem 7.6).
B. After you derived the general expression for the long-run cost function, substitute the parameter values A=1.5, a=0.5, b=0.5, w=20, r=10 to obtain C as a function of q only. Illustrate this relationship in a suitable diagram.
PLS EXPLAIN STEP BY STEP TASK 3 AND 4. THX IN ADVANCE.

12. The components of the OLS variances
Under assumptions MLR.1 through MLR.5, conditional on the sample values of the independent variables, the variance of β̂
j
under OLS is:
Var(β̂
j
) = σ² / (SST
j
(1 − R
j
²))
where:
σ² = the variance of the error term
SST
j
= the total sample variation of x
j
R
j
² = the R-squared from a regression of x
j
on all of the other explanatory variables, along with an intercept parameter
The variance of β̂
j
increases as R
j
² increases.
For the given model, which of the following would lead to a reduction of the sampling variance of β̂
j
?
Using the same data set with the same number of observations
Choosing an explanatory variable xk that is uncorrelated with the other explanatory variables in the model
Adding irrelevant explanatory variables to the model that are correlated with xj
Adding an explanatory variable that is equal to 5+xj

25 OF 25 QUESTIONS REMAININGTest ContentQuestion 1
Bear works for a company that pays employees in his position $12 per hour to work but also pays for medical and dental coverage. a 401 K retirement plan, and a week of paid vacation. Flynn has a job where he is paid $14 per hour without medical or dental coverage, paid vacation, or a 401 K . Flynn brags that he makes more money than Bear because he is paid more money per hour. Which of the following is true?
Flynn is correct.
The benefits Bear receives from his company, in addition to his wages, total more per hour than flynn earns.
Flynn is correct because it is unlikely Bear will ever use his medical or dental benefits, therefore the employer’s contribution to these is lost to Bear.
Flynn is not being paid based on his comparable worth but Bear is.
Flynn’s benefits provide him more satisfaction and motivation than Bear’s do.

Consider a homogenous good industry with four firms. Total demand is given by D(p) = 100 – p. The variable (=marginal) cost of each of the firms is c1 = 15, c2 = 25, c3 = 35 and c4 = 40. Firms compete in prices. Suppose firms 1 and 2 merge into one entity and produce with a marginal cost of 10. Which of the following statements is correct?
After the merger, the price in the industry increases by $10 and the profit of the merged entity is 1650.
None of the given answers.
After the merger, the price in the industry increases by $15 and the profit of the merged entity is 1650.
After the merger, the price in the industry increases by $15 and the profit of the merged entity is 975.
After the merger, the price in the industry increases by $10 and the profit of the merged entity is 975.

6 of 29
Suppose the president of a nation proposes a switch from a system of import quotas to a system of tariffs, with the idea that the switch will not affect the quantity of goods imported. Who will be in favor of the switch? Who will oppose it?
Quota holders will oppose the switch; people who will benefit from the tariff revenues will favor the switch.
Quota holders will oppose the switch; people who will benefit from the tariff revenues will favor the switch.
Quota holders will favor the switch; no one will oppose the switch.
Quota holders will favor the switch; no one will oppose the switch.
Quota holders will oppose the switch; no one will favor the switch.
Quota holders will oppose the switch; no one will favor the switch.
Quota holders will favor the switch; people who will not benefit from the tariff revenues will oppose the switch