Reference no: EM131298240
Microeconomic advanced walrasian equilibrium
NonCanada is a country unsure about its immigration policy. It is inhabited by a lone capitalist endowed with K units of generic capital, which he can transform one-to-one into a consumption good. NonCanada has no labour to begin with. If the government adopts policy s, then the country admits up to measure Ws of willing skill-s immigrants (and only these immigrants), where indexes the skill level: low (s = 1) or high (s = 2). The government announces that policy s will be adopted with probability where p1 +p2=1. Denote . Each skill-s immigrant can either work for the capitalist in NonCanada at the going wage ws or remain in his home country and earn there. Each type of labor requires skill-specific capital, which the capitalist can produce one-to-one from his endowment of the generic capital. For any , for some coefficients and units of skill-s specific capital and hs units of skill-s labor can be transformed into units of the consumption good.
Assume that Ws>(bs*Ks)/as and for all Before-and only before-the uncertainty about the immigration policy is resolved, the capitalist, an expected-profit maximizer, transforms some of his genericcapital into skill-specific capital. Then the policy uncertainty is realized, the immigrant labor arrives, and the capitalist chooses how much labor to hire, at the prevailing Walrasian equilibrium ws. As a result, the capitalist's expected profit is:
1. Explain the terms in the expression for the capitalist's profit in the display above.
2. Solve for the capitalist's optimal investment in capital as a function of p and the anticipated Walrasian-equilibrium wages (w1,w2).
3. Compute the anticipated Walrasian-equilibrium wages (w1,w2). What is the capitalist's profit when no uncertainty about the immigration policy exists, that is, when ps = 1 for some
4. Show that there exists an uncertain immigration policy that is worse for the capitalist than any certain policy. That is, show that one can find a p such that
5. When can one conclude that eliminating uncertainty about the immigration policy constitutes a Pareto improvement in NonCanada?
|
Business uses technology to publicize financial performance
: Explain how the business uses technology to publicize its financial performance. For example, does it use the Internet to provide information about its financial performance?
|
|
Bond with the present value of the future cash flows
: A bond selling to yield 10 percent after flotation? costs, but before adjusting for the marginal corporate tax rate o 32percent. In other? words,10 percent is the rate that equates the net proceeds from the bond with the present value of the future c..
|
|
Hazard-high outrage type of risk communication
: What is the key concept of Sandman's High Hazard/High Outrage type of risk communication? How should an organization best act and communicate in this type of crisis? What type of messages should they send?
|
|
How each applies to the functions practiced in your place
: Analyze the application of these management concepts to your place of work; the paper will not simply be a report on the five functions in general. Identify specific examples and explain of how each applies to the functions practiced in your place ..
|
|
Explain the terms in the expression for capitalists profit
: Explain the terms in the expression for the capitalist's profit in the display above. Solve for the capitalist's optimal investment in capital as a function of p and the anticipated Walrasian-equilibrium wages (w1,w2).
|
|
Role of culture when motivating employees
: Consider the role of culture when motivating employees. Describe some differences that can gain employee trust in at least three countries. Each country should be located on a different continent.
|
|
Identify three macroeconomic variables in the united states
: Identify three macroeconomic variables in the United States that impact the supply and/or demand of the product or service produced by the company you selected for your microeconomic/macroeconomic analysis papers.
|
|
Determine firms liquidity ratio as of the end of last year
: Use the balance sheet to determine the firm's liquidity ratio as of the end of last year.- Use the balance sheet to determine the firm's debtto-equity ratio. Interpret that ratio.
|
|
Growth into leadership characteristics
: Give an overview of this subject's background , utilize research and correlation to textbook topics to show: subject's growth into leadership characteristics that led to his or her leadership capabilities and decision making how will this person's..
|