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Question 1: Consider the following problem. DealCo has come up with a gadget and is contemplating whether to advertise during the next Superbowl. Consumers have heard of the gadget but are uncertain of its quality. Given its current price, they are unwilling to try it because of the uncertainty, but would be willing to purchase if they believed that it is high quality with high-enough probability. The marketing department of DealCo has estimated that, if they can persuade consumers to try the product, they will earn $50M in additional profits if the gadget is a high-quality one, while they will earn $20M in additional profits if the gadget is a low-quality one, with the difference arising from converting consumers to repeat customers when they have a good experience. How expensive should the Superbowl ad be so that the potential customers could take seeing the ad as a credible signal of high quality and so try the product?
Consider a village where residents have no other employment or income earning possibilities besides fishing. Each resident owns a boat.
The marginal product of capital is given by a Y/K. Setting TFP and L 1, examine the behaviour of the MPK as it varies between 0.3 and 1.
What could be some complements to pickup trucks? What could be some substitutes to pickup trucks??
A monopolist produces at constant marginal cost c = 1 It sells the product in the domestic market, where demand is Qd = 5 ? Pd, and some foreign markets with total demand Qf = 2 ? Pf Find the prices that will set in each market and the proportion of ..
Suppose that three groceries sell Bubba's Gourmet Red Beans and Rice. Bullseye market is able to acquire, stock, and market them for $2.00 per package. OKMart can acquire, stock, and market them for $1.98 per package. If the cost of going to a diffe..
Sam has preferences for consumption goods (C) and time spent on leisure (L). The utility function is u(C,L) = CL. The household also has a home production technology summarized by a production function. How much time will Sam spend in leisure? How ma..
In the production function Q = 10(L^1/2)*(K^1/2), calculate the slope of the isoquant when the entrepreneur is producing efficiently with 9 laborers and 16 unit
(A). Discuss the effect of a sterilized central bank purchase of foreign assets under the imperfect asset substitutability assumption.
If 9 people are chosen at random, what is the probability that exactly 7 of them favor the new building project?
The rate of return on an investment in medical education
Morgan Bank starts with $ 200 in bank capital. It then takes in $ 800 in deposits. It keeps 12.5 percent (1/ 8th) of deposits in reserve. It uses the rest of its assets to make bank loans. Show the balance sheet of Morgan Bank.
q1. suppose your elasticity of demand for your parking lot spaces is -2 and the price is 8 per day. if your mc is zero
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