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In Solved Problem 20.3, a firm calculated the optimal level of monitoring to prevent stealing. If G = $500 and θ = 20%, what is the minimum bond that deters stealing?
Solved Problem 20.3
Workers post bonds of B that are forfeited if they are caught stealing (but no other punishment is imposed). Each extra unit of monitoring, M, raises the probability that a firm catches a worker who steals θ by 5%. A unit of M costs $10. A worker can steal a piece of equipment and resell it for its full value of G dollars. What is the optimal M that the firm uses if it believes that workers are risk neutral? In particular, if B = $5,000 and G = $500, what is the optimal M?
What it does is to buy gold and at the same time sell bonds from its portfolio. Show the effects on the Fed balance sheet of a purchase of gold and a corresponding sterilization through an open market sale.
Draw the total and average cost curves for both methods. At what levels of output will the firm use the low-fixed-cost technology? At what levels of output will it use the high-fixed-cost technology?
Consider the economy of Hicksonia. A. The consumption function is given by C = 200 + 0.75(Y-T) Investment function is I = 200 - 25r Government purchases and taxes are both 100.
Check your estimate by finding the x-intercepts exactly
CH 12 (10%) Suppose that a monopoly faces inverse market demand function as P = 70?2Q, and its marginal cost function is MC = 40 - Q. Please answer the following two questions: a. What should be the monopoly's profit-maximizing output
Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50.
(Hint: Use the formula for the Gini coincident to determine the effect of a fixed transfer at different points in the income distribution.) Does the Gini have other ‘‘disadvantages''?
the supply curve for product x is given by qxs -340 10px .a. find the inverse supply curve.p qb. how much surplus
Describe the successive loss of information as the presentation changed from ratio to nominal.
In Argentina, if you do not reach an agreement with the government distributors, you can set up a less efficient Internet-based distribution system that you would generate $20 million in value to you. How does this affect the amount you could capt..
Prepare a graph of sales and net income for the years 2013 - 2016. For the purposes of this exercise, assume the following historical sales and net income figures for Joe's Fly-By-Night Oil.
Miguel is a farmer who produces oats. The oat market is a pure competition market. Miguel is now making choices in the short run. The going rate for oats is currently $24 per unit. The total cost function is as the table above shows. What is the p..
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