1. Bob orders 40 cases of beer from a Dutch distributor at a price of $40 per case.2. A U.S. company sells 200 transistors to a Spanish company at $15.00 per transistor.3. Eric, a U.S. citizen, pays $1,100 for a computer he orders from Dellosoft (a U.S. company).Complete the following table by indicating how the combined effects of these transactions will be reflected in the U.S. national accounts for the currentyear.Hint: Be sure to enter a "0" if none of the transactions listed are included in a given category and to enter a minus sign when the balance is negative.Amount(Dollars)ConsumptionInvestmentGovernment PurchasesImportsExportsNet ExportsGross Domestic Product (GDP)

When Bob orders 40 cases of beer at a price of $40 per case, then the consumption and import can be…

Answered: 1. Bob orders 40 cases of beer from a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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From the article: "The Centers for Disease Control and Prevention said..that keeping middle seats open [on airline flights] could sharply reduce the risk of exposure to the [Covid-19] virus." If tickets for all middle seats on a flight from Denver to Chicago are not sold: A - the fixed cost of the flight from Denver to Chicago would be less than if tickets for middle seats were sold. B - the profit from the flight from Denver to Chicago would be greater than if all tickets were sold. C - the airline selling the tickets would not be able to make a profit from this flight. D - passengers' willingness to pay for the other seats on the flight would decrease. E - the fixed cost of the flight from Denver to Chicago would not change.
M7
Jims diner is just about to open in memphis, tennessee. however, jim is trying to decide whether he wants to offer coke or pepsi soda products. he determines that, to offer either product, he will have to spend $1500 in sunk costs to purchase and install the appropriate paraphernalia. Ultimately, he chooses to offer coke products and agrees to pay coke 5 cents per ounce of coke sold for the right to use its product. After jim makes the investments specific to his soda choice, coke returns and asks for a fixed (One-time) fee in addition to 5 cents per ounce. What is the most jim should be willing to pay? explain
4
QUESTION 21 (Table: GoGo Gas and Fanny's Fantastic Fuel) Use Table: GoGo Gas and Fanny's Fantastic Fuel. The table shows a payoff matrix for GoGo Gas and Fanny's Fantastic Fuel in a small town. Each firm can set either a high price or a low price, and customers view both gas stations as nearly perfect substitutes. Profits in each cell of the payoff matrix are given as (GoGo's profit, Fanny's profit). If each firm sets the price independently, the Nash equilibrium outcome will be: Table: GoGo Gas and Fanny's Fantastic Fuel Fanny's Fantastic Fuel High Price S100, S100 $25, $150 $150, $25 Low Price High Price Low Price GoGo Gas $50, $50 O a $100, $100. b. $150, $25. c. $25, $150. d. S50, $50
2. Briefly explain four ways in which sellers can convince buyers that they are offering a product of high quality. Which methods apply to the following products: Hyundai automobiles, McDonald's hamburgers, diamonds? Explain.
Scenario: In the town of Isoville there are two grocery stores: Alfonso’s Ammenities and Bernice’s Bargains. The grocery stores are located at either end of the town, 1km apart. Recently, the manager of Alfonso’s Ammenities has proposed installing new self-service checkout technology, which promises to reduce the cost of each transaction at the grocery store by reducing staffing costs. The new technology is expected to reduce the marginal cost of selling a typical basket of groceries by $3. However, experience in other locations has shown that in about 25% of installations the self-service technology results in a significant increase in shop-lifting. In these cases, the need to hire extra security staff means that the marginal cost of a typical basket only falls by $1.50. Unfortunately, there is no way to know whether extra security will be required until after the new checkouts are installed.The Market: Isoville has 12,000 households, each of which purchases 1 basket of groceries per…
5. Given that excess demands are continuous and satisfy Walras' law, use Brouwer's Fixed Point Theorem to establish the existence of competitive equilibrium in a simple exchange economy. Suppose that an apple orchard is located next to a bee keeper. If the orchard produces x apples and the bee keeper produces y honey and the cost functions of the two are as follows: C(x) = x² + 10x +9 C(y) = y² - 8x What will be the socially optimal amount of apples that can be produced? How does this compare to privately optimal amount?
Q5.
Suppose Erin gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Erin is her time. As she gives more haircuts, Erin must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If she gives two haircuts, she gives up reading the paper and sleeping an extra half-hour. Erin's clients are a varied group willing to pay between $16.00 and $28.00 for a haircut. Assume that Erin cannot price discriminate, i.e., charge different clients different prices. If Erin charges $28.00 per haircut, she will have one client per week; if she charges $24.00, she will have two; if she charges $20.00, three, and so forth. The following table contains data on the revenues and costs of Erin's haircut business as a function of her price-quantity choice.…
Suppose that BMW and Audi are introducing new cars to the market at the same trade show. If both companies introduce a hybrid car, they will each earn $200 million. If they both introduce an electric car, they will each make $400 million. However, if they introduce different types of cars, the manufacturer that produces the electric car will earn $900 million, while the manufacturer that produces the hybrid car will make $500 million. In addition, BMW has committed to introducing their car first at the tradeshow by agreeing to pay Audi a guaranteed $200 million. 1) Complete a game tree to represent this game. 2) Based on your solution in part (a), determine the subgame perfect Nash Equilibrium solution.
Exercise A.5 Consider a company with market power that sells its product to two distinct consumer groups (type 1 consumers and type 2 consumers). Graphically illustrate the following situation: "if you charge a single price only consumers of type 1 will be able to buy the product but, if you charge differentiated prices, the two types of consumers will be able to buy it"

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