Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Consider a version of the property-right model studied in class involving a buyer (Simon) and a seller (Jonny). The timing of the game is as follows. Initially the parties cannot write a contract on investment or on sharing surplus. At this point, Jonny can make an investment that costs either 0 (no investment) or $600 (positive investment). This investment is sunk and specific to trading with Simon. After the investment has been sunk, and contracting becomes possible, so the parties negotiate. The ex post surplus generated is either 0 with zero investment or $1000 if Jonny made a positive investment. Trade occurs (or does not) between the two parties and the game ends.
a. Draw a timeline of the game. What is the ex-ante period and the ex-post period in this model?
b. What is the first-best level of investment? Explain.
c. Now assume that property rights can be assigned to either party of an asset critical to this production process. If Simon owns the asset he will receive 50% of the ex post surplus. If Jonny owns the asset he will receive 75% of the ex post surplus. In this incomplete contracting environment, who should own the asset? Explain your answer in the context of the key predictions of the property-rights model.
d. Now thinking generally (outside the confines of this question), what are the key limitations of the property-rights model? Do you think it explains the modern publicly traded corporation?
Suppose you are Chief Economist of the FCC. The Chairman has called you in to discuss a thorny issue. Two wireless broadcasters operate on adjacent frequencies.
The equality of P and MC means the firm is achieving allocative efficiency since the industry is producing the amount of product that equates society's valuation of that product and the price of the product.
Which country is capital abundant according to the Heckscher-Ohlin theorem? Given your answer to (a), draw the PPF for Canada. Also draw the indifference curve and the relative price line for the no-trade equilibrium.
The consumption taxes the government collects in a given period are not restricted to be levied on consumption from only in that period.
Illustrate what two kinds of changes in the capital stock can improve labor productivity. What determines the slope of the per-worker production function.
Harold is a no-nonsense boss who believes that the best way for an organization to achieve its goals is for workers to follow their boss's orders. Thus, he tells workers exactly what to do and how to do it. When Harold tells workers exactly.
Explain why do economists include only final goods in measuring GDP for a particular year and why dont they include the value of stocks and bonds sold?
Discuss the cyclical behaviour of the budget deficit in South Africa and provide an explanation for this behaviour. (half a page with references)
Beef supplies are sharply reduced because of drought in the beef-raising states, and consumers turn to pork as a substitute for beef. How would you illustrate this change in the beef-market in supply-and-demand terms?
Elucidate the effectiveness of these staffing practices and selection tools in meeting current and future employment needs of the organization.
Williams and Westrich stock is currently selling for $15.25 per share, and the dividend is expected to continue.
Tim buys 2 pizzas and sees 1 movie a week when he has $16 to spend. The price of a movie ticket $8, and the price of a pizza is $4. Draw Tim's budget line. If the price of a movie ticket falls to $4, describe how Tim's consumption possiblities cha..
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd