Tag: Economics – Others

Pick one of the following issues (1, 2, or 3):1.
One recent proposal is to roll back fuel efficiency standards for newer automobiles. The main argumentfor the move is focused on “safety and saving lives.” Here are three lines of argument:
A. “As cars and trucks become more fuel-efficient, the cost of driving goes down and people arelikely to drive more” and hence there will be an increase in road fatalities.
B. Cars that are more fuel-efficient cost more and hence people will keep their cars a bit longerthus missing out on safety features of newer cars — this will lead to an increase in fatalities.
C. Fuel-efficiency increases of vehicles result in lighter vehicles which are prone to more damagein accidents, but lighter vehicles also do not damage other vehicles that much. Depending onwhich effect is more, there could be increases in fatalities.
Pick only one of the lines of argument (A, B, or C), define the problem clearly, and present a datadriven argument to either defend or refute that position. (Source: unknown)

8.2 Automobile Accidents.
The file mlba::AccidentsFull contains information on 42,183 actual automobile accidents in 2001 in the United States that involved one of three levels of injury: NO INJURY, INJURY, or FATALITY. For each accident, additional information is recorded, such as day of week, weather conditions, and road type. A firm might be interested in developing a system for quickly classifying the severity of an accident based on initial reports and associated data in the system (some of which rely on GPS-assisted reporting). Our goal here is to predict whether an accident just reported will involve an injury (MAX_SEV_IR = 1 or 2) or will not (MAX_SEV_IR = 0). For this purpose, create a dummy variable called INJURY that takes the value “yes” if MAX_SEV_IR = 1 or 2, and otherwise “no.”
Using the information in this dataset, if an accident has just been reported and no further information is available, what should the prediction be? (INJURY = Yes or No?) Why?
Select the first 12 records in the da

Automobile Accidents.
The file mlba::accidentsFull contains information on 42,183 actual automobile accidents in 2001 in the United States that involved one of three levels of injury: NO INJURY, INJURY, or FATALITY. For each accident, additional information is recorded, such as day of week, weather conditions, and road type. A firm might be interested in developing a system for quickly classifying the severity of an accident based on initial reports and associated data in the system (some of which rely on GPS-assisted reporting). Our goal here is to predict whether an accident just reported will involve an injury (MAX_SEV_IR = 1 or 2) or will not (MAX_SEV_IR = 0). For this purpose, create a dummy variable called INJURY that takes the value “yes” if MAX_SEV_IR = 1 or 2, and otherwise “no.”
Using the information in this dataset, if an accident has just been reported and no further information is available, what should the prediction be? (INJURY = Yes or No?) Why?
Select the first 12 records in the da

Suppose you have two firms who dominate the market for smart phones, Peach Corporation and Bonjour, Inc. These firms face the following potential profits: a) if Peach and Bonjour both raise prices then each will receive a profit of $2 billion; b) if Peach and Bonjour both choose to lower prices then each will make a profit of $1 billion; c) if Peach raises its price and Bonjour lowers its price, then Peach will make a loss of $1 billion and Bonjour will make a profit of $3 biltion; d) if Peach lowers its price and Bonjour ralses its price then Peach wilt make a profit of $3 biltion and Bonjour will make a loss of $1 billion. Assume the two firms have similar costs.a. Draw a game theory matrix that shows each firms’ payoffs under all four possible strategy combinations.b. What is the Nash equilibrium? Why is the Nash equilibrium stable?c. Is this a Coordination Game or a Prisoner’s Dilemma Game? Why?d. If Peach and Bonjour formed a cartel, would that cartel be stable? Why or why not?

Aggregate Demand Shocks Only
U.S senators read about the glories of the internet, so demand for high-tech government purchases increase
Business read about the glories of the internet, so demand for high-tech investment purchases increase
Real (Supply) Shocks Only
Steelworkers go on strike, so less steel is produced
Around 2000, the glories of the internet fade a bit so innovations increase at a somewhat slower rate for years
The U.S government launches two costly wars almost simultaneously, using the draft to force many men to work much longer hours (affects potential output by pushing workers beyond efficient work hours)
The U.S government launches two costly wars almost simultaneously (affects aggregate supply as government competes for resources with private sector)
Both Aggregate Demand and Real Shocks
A series of investment banks like Lehmann Brothers and Bear Stearns go bankrupt (reduces both aggregate demand through financial crisis and aggregate supply through disruption of financial intermediation)

Assume that there are only two countries in the world (Home country h and Foreign country f), and only one factor of production: labor. Two goods, x and y, are produced. Let P
x
h
and P
y
h
represent the prices of goods x and y in the home country, respectively. Let a
x
h
and a
y
h
represent the unit labor requirements to produce goods x and y in the home country, respectively. (The subscript h replaced with f indicates the foreign country.) Each country has a fixed labor supply L, and labor productivity in each good is also fixed. All markets are assumed to be perfectly competitive.
Based on the above information, please answer the following questions:
If the relative price of good x is greater than its opportunity cost, which good should the home country specialize in producing? (10 points)
If (P
x
/ P
y
) > (a
x
f
/ a
y
f
), what should the home country and the foreign country produce, respectively? (10 points)

If you advertise and your rival advertises, you each will earn $3 million in profits. If neither of you advertises, you will each earn $7 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $10 million and the non-advertising firm will earn $1 million.
If you and your rival plan to be in business for only one year the Nash equilibrium is for your firm:
to advertise and your rival to advertise.
to advertise and your rival not to advertise.
not to advertise and your rival to advertise.
not to advertise and your rival not to advertise.
Which of the following is a correct statement about a Nash equilibrium in a two-player game?
The joint payoffs of the two players are highest compared to other strategy pairs.
A Nash equilibrium is always unique in real-world problems.
Given another player’s strategy, no player can improve her welfare by unilaterally changing her strategy.
All of the statements associated with this question are correct.

Question 19 of 37
Categerize the individual described as either a free rider, a forced rider, or just puring their part of the cost of a public good.
Amos:
Amos is a pacifist, meaning he is opposed to all war and violence. He is required to pay a portion of his income as tax toward an annual national defense budget, which includes spending cos war, war machines, and warfare training.
Emily:
Emily loves to watch television and is thankful that leer local city council provides everyone in the city with a TV set and 60 channels, even though she is required to pay an extra yearly fee.
Linus:
Linus is required to pay a 2% tax from his salary for a new city-wilde beautification project. However, Linus hasn’t worked in many years because he is retired, yet enjoys taking his time walking through the city’s new parks and gardens.
Adele:
A portion of Adele’s peoperty taxes are used to a series of public concerts in the park, even though she herself never attends.

The federal government issued one-time tax rebates-checks returning a small portion of taxes previously paid-to millions of Canadian residents, and Canadian real disposable income temporarily jumped by nearly $500 billion. However, household real consumption spending did not increase in response to the short-lived increase in real disposable income because
A. the one-time tax rebate failed to increase the recipients’ permanent income which determines an individual’s current consumption.
B. there is a considerable lag between an increase in disposable income and an increase in current consumption.
C. the size of the tax rebate was too small
D. tax cuts or tax rebates have no effect on consumption.
Which of the following economic theories can be used to account for this apparent non-relationship between real consumption and real disposable income?
A. the Ricardian equivalence theorem
B. supply-side economics
C. the permanent income hypothesis
D. direct expenditure offsets

Question content area Part 1 Suppose a professional basketball game is to be played at a suburban arena, which increases demand for parking on the night of the game.
Part 2 If the suburban area has the ability to create additional parking during periods of peak demand, then
A. the supply of parking will be more elastic and the price of parking will increase by a relatively large amount the night of the game.
B. the supply of parking will be perfectly elastic and the price of parking will increase by a relatively large amount the night of the game.
C. the supply of parking will be more inelastic and the price of parking will increase by a relatively small amount the night of the game.
D. the supply of parking will be more elastic and the price of parking will increase by a relatively small amount the night of the game.
E. the supply of parking will be more inelastic and the price of parking will not change the night of the game.