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Use a decision tree to illustrate how a risk-neutral plaintiff in a lawsuit decides whether to settle a claim or go to trial. The defendants offer $50,000 to settle now. If the plaintiff does not settle, the plaintiff believes that the probability of winning at trial is 60%. If the plaintiff wins, the amount awarded is X. How large can X be before the plaintiff refuses to settle? How does the plaintiff's attitude toward risk affect this decision?
Mary can build a computer in two hours less time than Tim. Working together, they can build a computer in 2 hours and 24 minutes. How long does it take Mary alone to build a computer?
Compare this data with the unemployment data. What does this information suggest about future productivity and growth for the U.S. economy?
In the town of Woodland, California, there are many dentists but only one eye doctor. The market demand curve for eye exams is P = 115 - 2Q, marginal revenue is MR = 115 - 4Q and the marginal cost for an eye exam is constantly $35.
Assume that there are no excess reserves inthe banking system and the reserve ratio is 40 percent. John Smith finds $10,000 incash under his mattress, stashed there by his great aunt who didn't believe in banks
Determine the circuit's operating points for an input dc level of 0.9 V.
If he has no other source of income, draw his budget constraint and write the equation. What is the most he can spend, Y, on these goods?
Many gyms offer a mixed two-part tariff pricing scheme. One can join the gym and then have daily access at a very low cost (often, free); alternatively, one can choose not to join and pay a higher daily fee (perhaps $10 or $15).
A firm has this linear production function: Q = 5K + 2L. Each unit of labor costs $10 to employ and each unit of capital cost $8 to employ. The firm is currently employing 100 units of labor and 200 units of capital. a. Calculate the total number of..
Suppose a pure monopolist is faced with the cost data shown in the table on the left and a demand schedule shown on the right. Calculate the missing total-revenue and marginal-revenue amounts. Instructions: Enter only whole numbers in the table be..
In 1951, Coke used to cost $0.37 for a pack of 6, an average house was worth about $16000, and a car was $1400 to 2200. All these goods are much more expensive now, and yet we buy and consume more of these things today than we did in 1951. Does th..
Howard Bowen is a large-scale cotton farmer. The land and machinery that he owns has a current market value of $4 million. Bowen owes his local bank $3 million. Last year Bowen sold $5 million worth of cotton. His variable operating costs were $4...
Real GDP for 2010 is less than nominal GDP for that year. But real GDP for 2000 is more than nominal GDP for that year. Why?
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