Q4 Consider an apartment complex that converts to a condominium As a result, the renters become owners of theirapartments. What in included in GDP?The rent was not included in GDP; the purchasen of the condominiums are included.O The rent was not included in GDP, the purchases are not included either.O The reat was included in GDP, and so is the purchase of the condominmma.O The rent was included in GDP; the purchases of the condominiums are not included

Answer: option d (The rent was included in GDP, the purchase of the condominiums are not included)…

Answered: Consider an apartment complex that…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You and your roomate are deciding whether to go to a party or not on Friday. Going to the party is fun and gives a benefit of 4. If you go to the party, there is a 50% chance you will get covid. If you do not attend the party but your roommate does and gets covid, there is 80% chance that you will get covid. The impact of getting covid is -10. If both of you stay home, you will not be exposed to covid and will not have fun, leading to a payoff of 0 for both of you. 3. Construct a game matrix based on the description above and find any (c) Nash equilibria. How would your answer change if one roomate was less social and enjoyed (d) partying less than the other? Change the payoff matrix in a way that is both consistent with one roommate being less social than the other and changes the prediction you found in (a). (Note: if you found multiple possible equilibria in (a), changing the outcome could mean either making one of your prior Nash equilbria the only Nash equilibrium or making an…
Jack and Diane work at a bakery. Jack can make either five batches of cookies or two cakes per hour, while Diane can make either four batches of cookies or three cakes per hour. At 9:00 a.m. they receive an order for 24 batches of cookies and nine cakes. What time is the soonest they can have the order ready?
Matthew is playing snooker (more difficult variant of pool) with his friend. He is not sure which strategy to choose for his next shot. He can try and pot a relatively difficult red ball (strategy R1), which he will pot with probability 0.4. If he pots it, he will have to play the black ball, which he will pot with probability 0.3. His second option (strategy R2) is to try and pot a relatively easy red, which he will pot with probability 0.7. If he pots it, he will have to play the blue ball, which he will pot with probability 0.6. His third option, (strategy R3) is to play safe, meaning not trying to pot any ball and give a difficult shot for his opponent to then make a foul, which will give Matthew 4 points with probability 0.5. If potted, the red balls are worth 1 point each, while the blue ball is worth 5 points, and the black ball 7 points. If he does not pot any ball, he gets 0 point. By using the EMV rule, which strategy should Matthew choose? And what is his expected…
Two travelers own an identical suitcase that contains identical antiques. The airline is liable for a maximum of $100 per suitcase. To determine how much to reimburse each traveler, the airline puts them in different rooms (so that they cannot communicate), and ask them to write down an amount (an integer number) between $2 and $100. If both write down the same number, the airline will reimburse both travelers that amount. However, if the two amounts are different, both travelers will be paid the lowest of the two numbers along with a bonus/malus: $2 extra will be paid to the traveler who wrote down the lower value and a $2 deduction will be taken from the person who wrote down the higher amount. What are the travelers’ best response functions? What are the Nash equilbria of the game? Are they Pareto efficient? Explain the intuition why.
**Practice** In order to alleviate their risks, they are considering a risk-sharing agreement. Carol would buy one CC and David would buy one DD. Six months from now, they would sell their coins, add up the total amount of money, and split it equally between them. Thus, if only one of the coins is successful, they would both still have some positive amount of money at the end. Assume that they can verify whether the other really made the investment. They know whether the investment is successful, since the price of the coin is public information, and they trust that the other will pay them as promised. Which of the following statements is accurate?A. They will not make that risk-sharing agreement.B. Carol is willing to take the risk-sharing agreement, but David is not.C. They may be willing to make that risk-sharing agreement, but it depends on information not given in the question.D. They will surely make the risk-sharing agreement.E. None of the statements above is correct.
Consider a city where everyone commutes to the city center and commuting cost per mile per month is $40. Each household occupies a 1,000-square-foot dwelling and has $7,000 worth of possessions in its dwelling. The probability that any particular household will be burglarized (involving the uninsured loss of all possessions) is 0.10 at the city center and decreases by 0.01 per mile (to 0.09 at one mile, 0.08 at two miles, and so on). The housing price is $1.00 per square foot at the city center. a) Draw the housing-price curve for locations up to five miles from the city center.
In the late 1990s, car leasing was very popular In the United States. A customer would lease a car from the manufacturer for a set term, usually two years, and then have the option of keeping the car. If the customer decided to keep the car, the customer would pay a price to the manufacturer, the "residual value," computed as 60% Df the new car price. The manufacturer would then sell the retumed cars at auction. In 1999, manufacturers lost an average of $480 on each returned car (the auction price was, on average, $480 less than the residual value). Suppose two customers have leased cars from a manufacturer. Their lease agreements are up, and they are considering whether keep (and purchase at 60% of the new car price) their cars or return thelr cars. Two years ago, Becky leased a car valued new at $18,500. If she returns the car, the manufacturer could likely get $12,950 at auction for the car. Eleen also leased a car, valued new at $19,000, two years ago. If she returns the car, the…
Nn3 Suppose an incumbent monopoly firm currently earns a profit of $50,000 per period. A potential entrant could enter and make a profit of $15,000 per period while also lowering the incumbent’s profit to $20,000 per period. The monopoly firm could seek to engage in predatory pricing, which would lead to both firms earning a loss of $5,000 per period. (a) Is there a Nash Equilibrium in this game? If so, what is it? (b) Discuss how this game might play out in the real world?
the video link is: https://www.youtube.com/watch?v=aqEz6kvXhc8please give me detailed solutions and calculations, thank you!
Three players (player 1, player 2 and player 3) each chooses a positive integer QE {1, 2, 3, . 100}. If all three players choose the same integer Q, each player gets $100/3. If all three players choose different integers, the player with the largest integer gets $100, and the two other players get $0. If two players choose the same integer Q, and the third player chooses a different integer Q', then the player playing Q' gets $0, and the two players who played Q get $50 each. Find 2 Nash equilibriums in this game. ....
You're a contestant on a TV game show. In the final round of the game, if contestants answer a question correctly, they will increase their current winnings of $3 million to $4 million. If they are wrong, their prize is decreased to $2,250,000. You believe you have a 25% chance of answering the question correctly. Ignoring your current winnings, your expected payoff from playing the final round of the game show is. Given that this is ______________ (POSITIVE/NEGATIVE), you___________ (SHOULD/ SHOULD NOT) play the final round of the game. (Hint: Enter a negative sign if the expected payoff is negative.) The lowest probability of a correct guess that would make the guessing in the final round profitable (in expected value) is (Hint: At what probability does playing the final round yield an expected value of zero?)
Stewart will have a total wealth of $12,000 this year, if he stays healthy. Suppose Stewart has a 50% chance of staying healthy and a 50% chance of getting sick. If Stewart gets sick, then he will have to pay $8,000 for medical bills, leaving him $4,000 of total wealth. Under these conditions, Stewarts expected wealth (a.k.a. expected value of wealth) is $8,000. Based on the graph shown below, what level of wealth with certainty (i.e., wealth that Stewart is certain to have) would make Stewart equally as happy as he is when facing the 50% chance of being sick?

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