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!
Question: Consumer A values consuming one unit of a widget at $900, while consumer B values consuming it at $600. There is a 3% chance of an accident from consuming the widget with damages equal to $4000. The firm's cost of production is $500 per unit. Assume that the firm is a perfect competitor and charges a price equal to marginal cost (including the expected value of any damages it would pay)
a) Is it efficient to produce and sell the widget to A? to B?
b) Now suppose that both consumers and the firm correctly perceive the accident risk. What is the price of the widget under no liability? Who buys the widget?
c) What is the price of the widget under strict liability? Who buys the widget?
d) Are the outcomes in (b) and (c) efficient?
e) Suppose instead that A has a 1% accident risk, while B has a 5% accident risk. The consumers know their own accident risks, but the firm perceives a 3% accident risk for all consumers. Damages in the event of an accident are $3000. What is the price under strict liability? Who buys the widget? Is this outcome efficient? Who would buy the good under no liability? Is this outcome efficient? Explain.
Is the demand curve for children downward sloping? Explain, being careful to specify exactly what you mean by the price of children. What is your evidence?
In 2007 and 2008 the Federal Reserve Open Market Committee voted to lower interest rates repeatedly. Please explain: a) why the Fed would do this, b) how the Fed would do this,c) Possible consequences on the economy of the Fed's actions.
nestleacute holds a 99-year lease for the land that the sanctuary spring sits on. while lease-holders are generally
Calculate consumer surplus in the case of entry deterrence and in the case of entry accommodation. Which situation leads to the largest consumer surplus?
Suppose that Taher's pizza business operates under competitive conditions and that his short-run production function is q=20^E. How much labor does he employ if the price of each pizza is p = $12 and the hourly wage is w0 = $6? [Hint: In this case, i..
Then, explain why the features of the development of capitalism and the characteristics of the development of the labor movement you have discussed led to class conflict.
Owing to the rising cost of copper, in 1982 the U.S. Mint changed the composition of pennies from 95% copper (and 5% zinc) to 2.5% copper (and 97.5% zinc).
For Karr Company, the predetermined overhead rate is 140% of direct labor cost. During the month, Karr incurred $90,000 of factory labor costs, of which $80,000 is direct labor and $10,000 is indirect labor. Actual overhead incurred was $119,000.
An Internet service provider (ISP) is contemplating an investment of $50,000 in new computer servers and related hardware. The ISP projects an annual rate.
Intel and Advanced Micro Devices make most of the chips that power a PC. What makes the market for PC chips a duopoly? Sketch the market demand.
What regional trade association/agreement could the SME leverage? How will a Trump presidency positively or negatively impact the SME's global expansion?
You are the owner of a family-owned restaurant. You do not pay yourself a salary or an hourly wage. How and why does this practice affect the economic cost of serving your patrons?
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