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Q1. Why does the assumption of independence of risks matter in the examples of insurance? Illustrate what would happen to premiums if the probabilities of house burning were positively correlated? Can you think of a situation where they might be negatively correlated?
Q2. ) If the price of baseball tickets is $12 every also hockey tickets are $20 every, draw the budget constraint for the consumer. Be sure to specifically label every intercept. Elucidate why (10, 6) is on this budget constraint but you cannot tell anything about the MRS at this point.
In national income accounting, an investment is regarded as. Conclude the probability that the annual net cash flows will be negative.
Then do similar for every of the determinants of supply in Equation 2.2. In every instance, would equilibrium market price increase or decrease.
They value campaign funding in terms of dollars spent. Therefore, after spending ci on a campaign.
Government budget going from deficit to surplus and the simultaneous enactment of an investment tax credit.
Describe the changes in the model parameter(s) and resulting changes if any in the hiring decisions of the three types of firms.
A state government wants to provide incentives for single parents to enter the labor market and become engaged.
An upward or downward movement along a given demand curve or involves an outward or inward shift in the relevant demand curve for housing.
A woman managing a photocopy establishment for $25,000.00 per year decides to open her own duplicating place.
Should the seniority rule be eliminated, what is MOST likely to gain greater influence over the process of selecting committee chairs.
Assume a household receives a grant of $500 of food stamps every month. How will this household's budget line be affected.
Two firms are located on the line and sell identical products. Consumers obtain K utility from consuming a product; assume that K is large enough that all consumers purchase from at least one of the firms despite the costs of transportation.
Explain the solution to the firm's cost-minimization difficulty ever occur off the iso-quant representing the required level of output.
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