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1. Why does the assumption of independence of risks matter in the examples of insurance? What would happen to premiums if the probabilities of houses burning were positively correlated? Can you think of a situation where they might be negatively correlated?
2. Small firms can discover the abilities of their workers more quickly than large ones because they can observe the workers more closely at a variety of tasks. Does it then make sense for people with high abilities to go to small firms? Give some reasons why and some reasons why not?
Governmental sources (public programs) and private payers are just a few examples regarding sources of health care revenue. Medicare, Medicaid, and managed-care programs are some types of payers that make up the revenue source for health care orga..
Analyse the determination of the appropriate amount of undeveloped land along this river as an externality and public goods problem
The equation QA= 1/2(12-Q)b) is the so called reation function of duopolist A in a COurnot model becasue given the value of Qb, Qa gives the best or profit-maximizing level of sales of oligopolist A. Show that this is the case with reference. Wha..
Individual investors lost millions and the NASDAQ (the stock exchange for most Internet companies) came tumbling down. What happened? Why did it happen? What could have been done to stop this unsafe surge in valuation?
In the competitive market, the market demand is Qd=48 - 5p and the market supply is Qs = 7P. The equilibrium price is4
Among the problems that hinder growth in developing economies are poor infrastructure, lack of financial institutions and a sound money supply, a low saving rate, poor capital base, and lack of foreign exchange. Explain how these problems are inte..
You cat's summer kitty-cottage needs a new roof. You are considering the following two proposals and feel a 15-year analysis period is in line with your cat' remaining lives. (There is no salvage value for old roofs.)
The government is considering undertaking one of the four projects A1, A2, A3, A4. These projects are mutually exclusive, and the estimated present values of their costs and of their benefits are shown in millions of dollars as follows.
A family decides to save for the college education of their kindegradener starting with her 6th birthday. They would ilike to have $40,000.00 at her 19th birthday.
Using the given table, find out the quantity where MC = ATC. Find out the quantity where ATC is at its minimum. Find out the quantity that is the most efficient operating point for the firm.
Describe the law of demand. Why does a demand curve slope downward? What are the determinants of demand? What happens to the demand curve when each of these determinants changes?
Suppose the annual inflation rate is at 2% and 8.5% of the labor force is currently unemployed. If you were on the Fed's Open Market Committee, what action would you prescribe? How would this affect the economy, the inflation rate, and the unemplo..
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