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- Q19The US demand curve for transporting freight by truck is а° - 580B - 60в "Р, where B denotes billion. Here, P is the price to transport a standard shipping container one mile, and quantity Q is the number of shipping-container-miles transported in a year. The marginal cost of transport is $1/mile (i.e., fuel and driver costs). Each truck can drive up to a maximum of 100,000 miles/year. Assume each truck carries one shipping container. The annual fixed cost of operating a truck is $200,000. Consequently, the average cost of a truck that drives q miles a year is ($200,000/q) +$1. All trucks have the same costs. There are no barriers to setting up a new trucking firm and/or acquiring additional trucks, and there are large numbers of people capable of running a trucking firm. Part (a) Sketch average and marginal costs for a truck, as a function of miles driven. Part (b) (i) (ii) (ii) (iv) (v) What is the price-per-mile of transporting freight by truck? How many miles does the combined US…None
- Q2Jack 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…
- please answer within 30 minutes.Arielle is a risk-averse traveler who is planning a trip to Canada. She is planning on carrying $400 in her backpack. Walking the streets of Canada, however, can be dangerous and there is some chance that she will have her backpack stolen. If she is only carrying cash and her backpack is stolen, she will have no money ($0). The probability that her backpack is stolen is 1/5. Finally assume that her preferences over money can be represented by the utility function U(x)=(x)^0.5 Suppose that she has the option to buy traveler's checks. If her backpack is stolen and she is carrying traveler's checks then she can have those checks replaced at no cost. National Express charges a fee of Sp per $1 traveler's check. In other words, the price of a $1 traveler's check is $(1+p). If the purchase of traveler's checks is a fair bet, then we know that the purchase of traveler checks will not change her expected income. Show that if the purchase is a fair bet, then the price (1+p) = $1.25.Two identically able agents are competing for a promotion. The promotion is awarded on the basis of output (whomever has the highest output, gets the promotion). Because there are only two workers competing for one prize, the losing prize=0 and the winning prize =P. The output for each agent is equal to his or her effort level times a productivity parameter (d). (i.e. Q2=dE1 , Q2=dE2). If the distribution of “relative luck” is uniform, the probability of winning the promotion for agent 1 will be a function of his effort (E1) and the effort level of Agent 2 (E2). The formula is given by...Prob(win)=0.5 + α(E1-E2), where α is a parameter that reflects uncertainty and errors in measurement. High measurement errors are associated with small values of α (think about this: if there are high measurement errors, then the level of an agent’s effort will have a smaller effect on his/her chances of winning). Using this information, please answer the following questions. Both workers have a…
- The probability that it will rain on any given day is 0.20, and the probability is independent from day to day. You are trying to decide whether or not to make a tee time tomorrow to play golf. This requires a commitment on your part of turning down, say, movie tickets in favor of playing golf. If you accept the tickets, you also make the commitment not to go golfing. There is a weather forecast that signals whether it will rain tomorrow or not. There is a 0.80 probability that it rains when there is a "rainy" forecast and a 0.125 probability of rain when there is a "sunny" forecast. The overall probability of getting a "rainy" forecast is 0.111. Assume you are risk neutral. You place the following monetary values on the potential outcomes: a sunny day at $95 the golf course a rainy day at the movies a rainy day at home a sunny day at the movies $20 -$18 $1Mete is Esra's boyfriend. Esra is expecting a marriage proposal from Mete. Today is Sunday. Mete says Esra that: (1) he is going to propose Esra on Monday or Tuesday or Wednesday or Thursday or Friday, at 10:00 pm. (2) he knows right now the day when he will propose (3) but the day of proposal will be a surprise to Esra: On the day of the proposal, she would not be expecting the proposal that day. Esra says Mete that what he says is impossible. Explain why Esra is right in a few sentences.Q25
