(O'Sullivan, 2.12) Consider a region where the self-sufficient wage is constant at $4. Suppose the payoff(profit) from innovation in the city with a population n measured in thousands is given by:π (n) = 2 +n¹/² − (n/10)-5.1 Suppose a group of 1 (thousand) workers form a city. Will other workers have an incentive to jointhe cluster?5.2 Suppose a group of 9 (thousand) workers form a city. Will other workers have an incentive to jointhe cluster?5.3 Compute the (stable) equilibrium size of the innovation city.

A payoff matrix is a procedure for communicating the consequence of players' decisions in a game. A…

Answered: O'Sullivan, 2.12) Consider a region…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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After Hurricane Maria, hundreds of nonprofit organizations streamed to Puerto Rico and other Caribbean islands to provide disaster relief. Research has found that coordination between nonprofits during disasters is difficult to maintain—it’s easy for individual nonprofits to fundraise and pursue programming on their own while ignoring other organizations working on the same issues. Additionally, there are incentives to do projects that are cheap and have fast turnaround, since donors respond to the visibility of organizations providing disaster relief. Consider two nonprofit organizations working in Puerto Rico. Together, they could spend time coordinating their efforts and run a shelter for hurricane victims, providing each organization with 100 utils. Alternatively, they could individually distribute paper towels—a simple, low-cost, fast, and visible project—and receive 5 utils. This situation can be modeled with the following payoff matrix: Nonprofit 2 Run Shelter…
Recall a sharecropping agreement is where a farmer provides a percentage of their yield to a landowner in exchange for renting the land. Consider the graph below and answer the following questions (include calculations in work): 11 VMPL 10 8 a*VMPL 5 4 3 2 1 10 15 20 25 30 35 40 45 50 55 Labor (Hour) "andıno
Suppose that the following graph shows a free market equilibrium, with QE as the equilibrium quantity. PRICE QE QUANTITY Supply Demand For an output level exactly at Q, the value of a unit to a buyer is ? the cost of a unit to a seller.
A domestic economy can produce wine or bread using labor with the following technology: Yw = 21 Y6 = 0.51 Preferences in this economy are Cobb-Douglas and given by: u (Cu, Cb) = 0.2 log cu + 0.8 log cs Total labor endowment in this economy is 1 million workers that are perfectly mobile across sectors. A foreign economy is instead characterized with the following technology: Y = 31 %3D The foreign economy has the same preferences as the domestic, but a labor supply of 10million workers. What is the equilibrium competitive wage rate in units of bread for the home economy under free-trade? 3/2 2 2/3 1/2
Consider figure 8.2 and 8.3 on pages 218 and 219 from the textbook. . Consider each of the following scenarios separately. 11. I Suppose in the leader country (Country 1) there is a rise in cost of copying at every level of technology gap (A1/A2), possibly caused by factors influencing the cost of copying other than technology gap (possibly education). Show how these graphs will be affected as a result of this new change. On your well labeled graphs you must clearly indicate the shift of the relevant curve (s) and the direction of the shift. Explain your answer in 2-3 sentences. Suppose pandemic reduces population growth decreasing the number of workers available to both the countries by same amount. Show how these graphs will be affected as a result of this new change. On your well labeled graphs you must clearly indicate the shift of the relevant curve (s) and the direction of the shift. Explain your answer in 2-3 sentences.
Note : Please (Only do part 3) Part 1: Some Once-lers live in a wonderful land filled with beautiful truffula trees. They each independently chop down the truffula trees to make and sell thneeds. The total value of thneeds sold is f(x) = 150x − 5x2, where x is the number of truffula trees chopped down. If it costs 20 dollars to chop down a truffula tree, how many trees will the members of the Once-ler family collectively chop down? a. 13 b. 28 c. 24 d. 15 e. 14 Part 2: (continued from previous question) The Lorax appears from a truffula stump and demands that the Once-lers act more responsibly. He demands that they chop down the socially optimal number of truffula trees. How many trees would be chopped down in the social optimum? a. 13 b. 16 c. 15 d. 14 e. 12 Part 3: (Continued from above) Because the Once-lers are motivated by individual profit and won’t simply do what the Lorax says, he instead imposes a fine for every tree that the Once-lers chop down. How big must this fine be…
The Bretton Woods conference of 1944 established a post-war economic order which, to a large degree, we are still experiencing today. List the three (3) institutions created at Bretton Woods and describe their functions. (100 words maximum)
Consider a world composed of two countries, Home (H) and Foreign (F). Individuals living in each countryi = H, F have preferences over two goods x and y.In each country there is only one factor of production, labour, which is perfectly mobile between industries butimmobile between countries. The total labour endowment at Home is LH = 10 and the total labour endowmentin Foreign is LF = 10.The marginal product of labour in each industry is constant. At Home, one worker can produce 2 units ofgood x or 1 unit of good y per unit of time; at Foreign one worker can produce 1 unit of good x or 2 units of goody per unit of time.Assume that consumers in Home and Foreign always consume goods x and y in the same quantity regardlessof their prices. That is, Cxi = Cyi, i = H, F F. Suppose that the equilibrium price of good x (keeping the price of good y as 1) is equal to 1. Determine the optimal production and consumption both at Home and Foreign when they open up to trade. Depict this in graph.
Consider a world composed of two countries, Home (H) and Foreign (F). Individuals living in each countryi = H, F have preferences over two goods x and y.In each country there is only one factor of production, labour, which is perfectly mobile between industries butimmobile between countries. The total labour endowment at Home is LH 10 and the total labour endowmentin Foreign is LF = 10.The marginal product of labour in each industry is constant. At Home, one worker can produce 2 units ofgood x or 1 unit of good y per unit of time; at Foreign one worker can produce 1 unit of good x or 2 units of goody per unit of time.Assume that consumers in Home and Foreign always consume goods x and y in the same quantity regardlessof their prices. That is, Cxi = Cyi, i = H, F.(a) Calculate the opportunity cost of producing one additional unit of good x in terms of units of good y in Homeand Foreign.(b) Derive the production possibilities frontier (PPF) for Home and Foreign and plot it in a graph…
Assume an economy consists of two agents, a and b. Individual a has available 1 unit of time which he divides between leisure ra and labor ℓa . Likewise, individual b has available 1 unit of time which he divides between leisure rb and labor ℓb. Commodity x is produced by one competitive firm according to the production function: x=√L , where L denotes labor hired. The firm is fully owned by agent a. The utility function of the two individuals are: u(xa,ra)=xara and u(xb,rb)=xbrb . Taking the price of labor as the numéraire (i.e. w=1), find the competitive equilibrium for this economy.
Suppose we have a Hotelling model with N = 150 people who consider the good very valuable at V = $1000 so all consumers will buy from one store or the other, transport costs are t = $25 a mile. We have two competing firms at opposite ends of the road. Firm 2 is located at 0 and firm 2 at 1. Let marginal cost of production be $3. show that: D1= 150(p2 - p1 + $25)/50 Profit1= 3(p1 - 3)(p2 - p1 + 25)

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