Tag: Economics – Others

Bllateral monopolySuppose the one bar in a small town wants to hire a lounge singer to increase the bar’s popularity. Because it is the only business demanding this type of labor, it has monopsony power. There is only one good singer in town, so that singer has monopoly power, as well.The following graph depicts the supply and demand for labor in this market, as well as the marginal expense ( ME_(L) ) curve faced by the bar and the marginal revenue (MR) curve faced by the singer.
Complete the following table by choosing the number of hours the bar would demand and the wage it would pay to maximize its profits as amonopsonist. Then choose the number of hours the singer would provide and the wage they would charge as a monopolist.
Preferred Outcome:
Monopsonist (Bar)
Monopollst (Singer)
True or False: In such markets, the prevaliling wage and quantity of labor supplied will always be the average of the hours and wages desired by thetwo partles.TrueFalse

Interest rates have been at 77% for the past four years. The economy goes into a recession causing the Fed chairperson to announce an expansionary monetary policy with an interest rate target of 2.5%. You forecast interest rates for next year to be 77%. This is an example of applying the theory of
fundamental expectations
forecast expectations
rational expectations
adaptive expectations
Part 2
Suppose a change in the way a variable moves such that it is much larger than before. If adaptive expectations accurately represent how people form expectations, then the difference between the variable and its expected value is
zero, on average
less than zero
greater than zero
Part 3
There are many faults associated with adaptive expectations except that
predictions of future values affect expectations.
past data do not help predict future values of variables.
individuals utilize more information that just past data.
people adjust to new information.

Consider total cost and total revenue, given in the following table: In the final column, enter profit for each quantity. (Note: If the firm suffers a loss, enter a negative number in the appropriate cell.)
Quantity
Total Cost (Dollars)
Marginal Cost (Dollars)
Total Revenue (Dollars)
Marginal Revenue (Dollars)
Profit (Dollars)
4
5
6
7
In order to maximize profit, how many units should the firm produce? Check all that apply.
In the previous table, enter marginal revenue and marginal cost for each quantity. On the following graph, use the green points (triangle symbol) to graph the marginal-revenue curve, then use the orange points (square symbol) to plot the marginal-cost curve. (Note: Be sure to plot from left to right and to plot between integers. For example, if the marginal cost of increasing production from 1 unit to 2 units is $5, then you would plot a point at (2.5, 5). The marginal-revenue curve and the marginal-cost curve cross at a quantity:

26 Question 11 of 15c.
Bet in the real world, of course, servers each make their own docision so be mean er nice. Suppose that you are on a shift with nine other servers, and some servers ace being nice and others are leing moan. You are trying to decide whether to be nice or mean. What is the payoff to you if you switch your behavior from mean so sice? Individual payoff of becoming nice: $d.
When are you most likely to be nice?
You are equally likely so be nice is either tip arrangement.
You are more likely so be nice in a tip pool.
You are more likely so be nice when you keep your own sips.
If the resturast cares a lot about keeping its customers happy, which policy will it follow?
The restaurant is indifferent between the two tip arrangemens because in generates the same likelibood of servers being friendly.
The remanant will let servers keep their own tips.

Bruegger’s Bagels and Einstein Bros. Bagels, which students view as very close substitutes, each have a franchise just off campus. The two shops are considering how to price their basic bagel with cream cheese, with the possible outcomes indicated in the payoff matrix.
If the two bagel shops have best responses, what are they?
Payoff Matrix for Bruegger’s Bagels and Einstein Bros. Bagels
Einstein’s bagels cost $4.00
Einstein’s bagels cost $2.50
Bruegger’s bagels cost $4.00
Bruegger’s weekly profits = $2,000
Einstein’s weekly profits = $2,000
Bruegger’s weekly profits = $500
Einstein’s weekly profits = $3,000
Bruegger’s bagels cost $2.50
Bruegger’s weekly profits = $3,000
Einstein’s weekly profits = $500
Bruegger’s weekly profits = $1,000
Einstein’s weekly profits = $1,000
Group of answer choices
Both will charge $2.50.
Both will charge $4.00.
One will charge $4.00, and the other will charge $2.50.
There is no best response for either shop.

We use the following regression modelD=β1+β2P+β3PC+uto study the effect of changing a product’s sales price P on the demand of the product D fora home company.In the regression, sales price of a similar product by the home company’s competitor,denoted by PC, is also considered.How would you interpret coefficient β2 ?
A unit increase of the home company’s price would change the demand by β2, if the competitor would not change their price.
A unit increase of the competitor’s price would change the demand by β2, taking into account that the home company would change their price in reaction to the competitor’s price change.
A unit increase of the competitor’s price would change the demand by β2, if the home company would not change their price.
A unit increase of the home company’s price would change the demand by β2, taking into account that the competitor would change their price in reaction to the home company’s price change.

Suppose that there are two countries, Thailand and Myanmar, each of which produces two goods, Cloth (C) and Wheat (W). Each country has 100 Hours of Labour that it can put into each good. They produce each good for the following labour costs:
Thailand can produce one unit of Wheat for 2 hours of labour.
Thailand can produce one unit of Cloth for 4 hours of labour.
Myanmar can produce one unit of Wheat for 8 hours of labour.
Myanmar can produce one unit of Cloth for 4 hours of labour.
15. What is the opportunity cost of each good for Thailand? What is the opportunity cost of each good for Myanmar? [2 points]
Suppose that Thailand and Myanmar reach a trade agreement where they can trade 1 unit of Wheat for 1 unit of Cloth.
16. Draw Thailand’s PPF both (i) under Autarky and (ii) under Trade with Myanmar. Do so with Cloth on the x-axis and Wheat on the y-axis. Include all x-intercepts and y-intercepts. [2 points]

Name:USC ID:(iii) Fill in the table below with the appropriate lettered graph.(4 points) Hint: There is emetly one sruph for each answer.
Rewomen made by the tea company when they charge the market equilibrium price.
The money saved by consumers if they are able to buy at a price below market equilitarium.
The profit made by a supplier if they sel at a price that is higher than market equilibrium.
The money spent by the consumers if they always buy at the maximum price they can tolerate.
7 Consumer/producer surplus [12 points]
The supply p3(q) and demand p3(q) of a brand of luxury tea is given below where p is the price in dollars per box of tenbags and q is the quantity of booes in hundreds:
pi(q)=2q 15, p(q)=150q 1
You may use without justification that market equilibrium is (q**,p**)=(5,25).
(i) Find producer sumples at explibletiem. (4 points)
(ii) Find consumer surplus at equilibrium. (4 points)

Jessica and Buster both produce nuts and coffee. They each prefer to consume a diet that is half nuts and half colflee. Both have access to the same resources.If Jessica focuses on producing only coffee, she can produce 20 pounds of coffee in a week. If she only produces nuts, she can produce 40 pounds of nuts in a week.Buster can produce a maximum of 15 pounds of coffee in a week. He could also choose to produce only rivts, in which case he can produce 20 pounds of rults a week.
Part 1 ( 0.8 point)Who has an absolute advantage in coffee production? Who has an absolute advantage in nut production?Choose one:
A. Jessica has an absolute advantage in coffee, and Buster has an absolute advantage in nuts.
B. Buster has an absolute advantage in both colfee and nuts.
C. Buster has an absolute advantage in coffee, and Jessica has an absolute advantage in nuts.
D. Jessica has an absolute advantage in both colfee and nuts.

Based on the industry-low, industin- average, and industry-Nigh values for the benchmarking data on ppos-7 of each issue of the Fire, which of the following do nest indicate that one of move elements of your compary’s costs are too high relative to the costs of rival companies?
The reject rates for beanded shoe production at one or more of your companys production facilities wee well above the induntry average
Yor companyt wanhsuceant totithalion experies per banded pair sodd ast above the indurty average in sevetal negions
Your compary’s marketing expentes per pale sold in both the intechet and wholesale segments of two or mone reglons are the highest is the indurtry
Your compary’s operating profts per pair sold in all 4 geographic regions of the wholewale segment for branded looterar are below the indurtry-Nigh values
Wour companys labor costs per pair produced at one or more plants are 20 s er more above the induatry averape number