Tag: Economics – Others

The inspection data of the facility, which produces 800 pieces of aluminum foil per day, are given in the table below. Warning limits are used in the analysis of data. The data are ordered from top to bottom. The company wants to have a 96.5% solid product. According to ISO standards, the acceptance limit is equal to the process capability coefficient. For the initial analysis, mu=4.5856 and sigma=0.1899. USL =5.7691 and ASL =3.4911 values are given. If necessary, the same analysis data can be used if the second graph is drawn.
Graph of initial acceptance sampling: Graph of the second acceptance sampling:
a. Draw the first and second acceptance sampling graphs. ( 25 points)
b. What data should be eliminated? ( 25 points)
c. What is the standard deviation of the second acceptance sampling? ( 25 points)
d. According to these data, is the production process in the facility a stable process? Interpret and decide according to the results you find. ( 25 points)

Question 14 of 15Suppose that in order to prevent loss of revenue due to used product markets, smart phone providers successfully lobby the government to make it illegal to buy or sale used smart phones. In effect, this limits consumers’ property rights over their smart phones. Assuming that black markets do not exist and new phones are more expensive than used phones, which of the following statements is true?
There is no loss of mutually beneficial transactions since all consumers who would have bought a used phone can now simply purchase a new phone for the same price as a used one.
The equilibrium price and quantity of used phones will increase.
The equilibrium price and quantity of used phones will remain the same.
There is a loss of mutually beneficial transactions in the economy since some consumers would be willing and able to buy used smart phones and some would be willing and able to sell their used phones. Now, everyone must purchase news phones from providers.

. The monopoly has two key features, which are
(a) barriers to entry and no close substitutes.
(b) franchises and barriers to entry.
(c) barriers to entry and close substitutes.
(d) close substitutes and no barriers to entry.
2. An industry in which economies of scale allow one firm to supply the entire market at the lowestpossible cost is called a
(a) legal monopoly
(b) natural monopoly
(c) single price monopoly
(d) one firm monopoly
3. Which of the following is TRUE of a natural monopoly?
(a) Its long-run average cost curve slopes upward as it intersects the demand curve.
(b) Economies of scale exist to only a very low level of output
(c) Economies of scale allow one firm to supply the entire market at the lowest possible cost
(d) The firm is not protected by any barrier to entry
4. If a monopolist lowers its price and its demand is inelastic, then its
(a) total revenue increases
(b) total revenue decreases
(c) total revenue does not change
(d) total revenue is negative

III. [Q13-Q16]
Go back to [BOX 1], and add two extra assumptions: The consumption function: C = 0.75(Y-T) [M/P 1], 0. Emunistan is currently in the liquidity trap, so the current IS curve intersectwith the flat portion of the LM curve. Answer the following Qs with reference to [FIGURE 3] below.
[FIGURE 3]
[Q13-Q14] Suppose that is 0.13.
[True/False] The fall in the price level from P0 to P1 fails to increase theaggregate purchase.
14. [True/False] Therefore, the AD curve is vertical passing through the two points 0 and A.
[Q15-Q17] Suppose that > 0.15.
[True/False] The fall in the price level from P0 to P1 shifts the IS curve out.
16. [True/False] Passing through the two points 0 and B, the AD curve becomes flatter (than with = 0).
17. If =5, what is the (common) value of Y in the boxes?
[FIGURE 3] Republic of Emunistan has the following features in [BOX 1] below:
[BOX 1] It is at the initial LR eq’m with ( P0,Y0,r0,M0 ), where

You are Chair of the Federal Reserve Board. In your meeting with the Foderal Opea Market Committee, the committee mecting, a moporter acks you to csplain what OMOs are and how yow will we them lo increase the money supply.Yoe reply thatOMOn are the sellisg med beying of povernemen necurities. The many moply incrowes when purchaning occurs and confrocts whe whing ocons. OMON wod by chapgeg be mewet of exess reserves available is the banking vyiem.and load to as increme in the money supply-OWOs are the selling and beying of governmest securtion. The moery sepply increases when selling occurs and contrasts whes beying oocens. OMOs wodk by changing tie anownt of ewess reserves anailable in the banking syitem.Open market opentions refer to manipulating the rate at whidh the Fodend Roerve Bank (Ied) loans money to member banks. An iscrease in the money supply ovoun whea the Fod lowens dis rate, which iscreases the amount of escesa reserves in the banling syatem.

Question 3.B.1 50%
You are the owner of a hotel complex and need to hire a manager to operate the facility. Because you live far away from the hotel, you will not be able to observe the manager’s effort. Your profit depends on the state of the economy and the manager’s effort level as shown in the Table below.
Hotel Gross Profit in £ (excluding manager’s compensation)
Economic Recession (probability = 0.4)
Economic Boom (probability = 0.6)
Manager’s Effort: Low effort
£100,000
£300,000
Manager’s Effort: High effort
£200,000
£400,000
You have identified a local person, Cathy, as someone with experience in hotel management and a good knowledge of the local market. Her net utility is the difference of the salary she receives minus the disutility from effort. The disutility from low effort is £2,000 while the disutility from high effort is £10,000. You may pay Cathy a flat salary of £60,000, or a salary of £30,000 plus 10% of gross profits. Which of the two compensation systems will you choose?

There have been high critiques for the validity of the downward sloping Phillips Curve after the 1970’s periods of stagflation, however, A.W. Phillips has already provided an explanation of such critique because ———————————————.Question 23 options:
A.W. Phillips excluded the periods of high international influence in which this was the factor that caused the 1970’s stagflation in the US (after the oil crises in 1973)
A.W. Phillips included the periods of high international influence in which this was not the factor that caused the 1970’s stagflation in the US (after the oil crises in 1973)
A.W. Phillips excluded the periods of high international influence in which this was not the factor that caused the 1970’s stagflation in the US (after the oil crises in 1973)
A.W. Phillips included the periods of high international influence in which this was the factor that caused the 1970’s stagflation in the US (after the oil crises in 1973)

A drug development company develops a new antiviral medication.
It applies for a patent and for Federal Drug Administration (FDA) approval to sell it. The firm estimates that the patent application has a 30% chance of success and that FDA approval has a probability of 50%. If both applications are successful, the drug can be sold to a major drug producer for $14 million. If FDA approval is obtained but the patent application is unsuccessful, the drug can be sold for $5 million. If the drug is not approved by the FDA, it is worth nothing. What are the expected value and variance of this drug? (Work in units of $1 million.)
The expected value (EV) of the medication is EV = ______ million. (Enter your response rounded to two decimal places.)
The variance of the medication’s value is Variance = ______ million. (Enter your response rounded to two decimal places.)

You have exams in economics and chemistry coming up and 5 hours available for studying. The following table shows the trade-ofls you face in allocating the time you will spend in studying each subject.
Hours spent and midterm scores for each choice
Choice
Economics (Hours)
Chemistry (Hours)
Economics (Midterm Score)
Chemstry (Midterm Score)
A
5
0
95
71
B
4
1
93
79
C
3
2
90
85
D
2
3
86
90
E
1
4
81
92
F
0
5
74
94
Use the multipoint curve drawing fool to plot a production possibiltes fonter showing the trade-off between your economics grade and chemistry grade. Phot all choices A through F Procesty label this curve. Carefuly follow the instructions above, and only draw the requred objects. Alter ploting the final point of your multipoint curve, press the Esc key or use a long press on the last point fo end the line.
If you are at point C, what is the opportunity cost of increasing your chemstry score by studyng one additional hour for the chemistry exam? fewer points on your economics exam.

a. The Federal Reserve requires commercial banks to have reserves becausereserves are needed for banks to earn money.reserves provide the Fed a means of controlling the money supply.reserves are a claim that commercial banks have against the Federal Reserve Banks.this is the way the Fed monitors bank solvency.
b. Reserves are an asset to commercial banks but a liability to the Federal Reserve Banks becausthese funds are cash belonging to the Federal Reserve Banks, but they are a claim that th against commercial banks.they must be equal to determine net worth.commercial banks and the Federal Reserve Banks do not use the same accounting systerthese funds are cash belonging to commercial banks, but they are a claim that commercia Reserve Banks.
c. Excess reserves are equal toactual reserves required reserves.total reserves – total deposits.actual reserves – required reserves.required reserves – actual reserves.
d. Excess reserves