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Problem: Imagine there are two types of mayors: selfish and selfless. 70% of mayors are selfless. Voters do not observe the type of the mayor. They instead observe whether the mayor decided to spend money on improving gthe facilities of the local school or the local casino. The voters know that most of the time the best use of money is to spend it on improving the school. 15% of the time there is a boom in tourism and in this special situation, the best action is to improve the casino. Voters do not know if there is a boom in tourism. They only know that a good mayor will always do the correct thing (improve the local school in normal times and improve the casino when there is a boom). They also know that selfish mayors always improve the casino. What is the probability that the mayor is selfish after observing that the mayor built a casino?
Suppose a monopolist faces the demand relationship shown in the table below. If the firm is currently selling four units per day and wants to sell five units, what is the effect on total revenue
Suppose a central bank does not satisfy the Taylor principle; that is, vp is less than zero. Use a graph to analyze the impact of a supply shock.
All U.S. states subsidize education for college students, mostly by charging below-cost tuition - Nearly free tuition is available in many European countries and Canada.
How do you think the size of marginal costs of newspaper production compares to the size of average total costs? Explain your reasoning.
What is the unit sales price at which these companies will have the same break-even point in terms of unit sales?
Interpreting If you were a semiskilled worker, what could you do to move into a higher category of noncompeting labor?
Assume you are a U.S. citizen and currently you can exchange $180 (USD) for 125 GBP (British Pounds). What is the indirect quote relating the USD to the GBP?
What does this exercise show about the standard deviation? The idea is to illustrate that the standard deviation is not a function of the value of the mean
In the winter, which is the peak season for winter coats, the price of winter coats is typically higher than it so in the summer.
Describe the steps in making sure that flights take off on time for an airline. Describe the different steps that must occur for an on-time plane departure.
What extent did the mercantilism/colonialism model play in fueling the industrial revolution?
A firm is expected to earn $100,000 per year forever. If the annual discount rate is 10 percent, what is the present value of the firm?
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