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 join the cluster? 5.2 Suppose a group of 9 (thousand) workers form a city. Will other workers have an incentive to join the cluster? 5.3 Compute the (stable) equilibrium size of the innovation city.
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- During the campus Spring Fling, the bumper car ride has a problem of cars becoming disabled Lin need of repair. Repair personnel can be hired at the rate of $10 per hour (paid based on time on duty, including idle time), but they only work as one team. That is, if one person is hired One nepairperson can repair cars in 30 minutes on average. Two repairpeople take 20 minutes distributed). Tuợt consider the option of hiring two repairpeople. What is the average cost (out-of-pocket cost plus opportunity cost) per hour? (S/hr) (A) (B) (C) (D) (E) $70 $80 $90 $100 $110A particular road is used by N drivers each day. Each driver obtains a benefit v from the journey and incurs a cost c(N) that increases with the number of drivers on the road due to congestion. Suppose that the cost incurred is given by c(N) = a + bN, for some positive numbers a, b. If the agent decides not to use the road, they receive 0. You may assume throughout that the number of drivers N can be any real number (rather than an integer). Each driver uses the road at most once. Suppose that the government charges a toll t (a congestion charge) for each journey. Find the optimum toll. Interpret your answer in terms of the externality that each driver imposes on othersSuppose that Zamboni Enterprises is the only company that sells zambonis (ice resurfacing machines). To produce the machines, the company hires assembly workers. Since these workers can work in many different companies, Zamboni Enterprises must pay them the market wage, which is equal to $6. The number of zambonis that the company produces, which is denoted by y, is proportional to the number of assembly workers that it hires, which are denoted by N; in particular, the production function is given by y=0.76N. The economywide demand for zambonis is given by the following demand function: y=2191-219p, where y is the number of zambonis that consumers are willing to purchase at price p. Given this market structure, how many assembly workers will Zamboni Enterprises choose to hire? How many zambonis will Zamboni Enterprises produce and sell?
- Suppose that Zamboni Enterprises is the only company that sells zambonis (ice resurfacing machines). To produce the machines, the company hires assembly workers. Since these workers can work in many different companies, Zamboni Enterprises must pay them the market wage, which is equal to $6. The number of zambonis that the company produces, which is denoted by y, is proportional to the number of assembly workers that it hires, which are denoted by N; in particular, the production function is given by y=0.76N. The economywide demand for zambonis is given by the following demand function: y=2191-219p, where y is the number of zambonis that consumers are willing to purchase at price p. Given this market structure, how many assembly workers will Zamboni Enterprises choose to hire? How many zambonis will Zamboni Enterprises produce and sell? What will be the price of a zamboni? If the market for zambonis were competitive, how many zambonis would be produced? If the market for…Suppose that Zamboni Enterprises is the only company that sells zambonis (ice resurfacing machines). To produce the machines, the company hires assembly workers. Since these workers can work in many different companies, Zamboni Enterprises must pay them the market wage, which is equal to $6. The number of zambonis that the company produces, which is denoted by y, is proportional to the number of assembly workers that it hires, which are denoted by N; in particular, the production function is given by y=0.76N. The economywide demand for zambonis is given by the following demand function: y=2191-219p, where y is the number of zambonis that consumers are willing to purchase at price p. If the market for zambonis were competitive, how many zambonis would be produced? If the market for zambonis were competitive, how many assembly workers would be hired? If the market for zambonis were competitive, at what price would zambonis be sold?Suppose the local economy experiences an influx of both skilled and unskilled workers, what will happen to prices of goods and services? Group of answer choices Since this increases the supply of labor, prices and wages both decrease. Since this increases the demand for labor, prices and wages both increase. Since this decreases the supply of labor, prices and wages both decrease. Since this increases the marginal product of labor, prices and wages both decrease. A worker on a Texas oil rig is likely to earn _______ than a reception because _________. Group of answer choices less; the job has unattractive characteristics. more; the job is more fun. more; the job is more prestigious. more; the job is more dangerous. please answer two questions
- Utility. Suppose we have two cities, 1 and 2. Assume every individual has the same utility function given by: u(w;,r;) = 4 * WJ - 0.75 * r; where j = 1 or j = 2. Furthermore, for all parts of the problem assume the total population is fixed at 1, 000 and wages in each city are given by: W1 = 15W2 = 12 (a) What is the utility from each choice if r1 = 20 and 1'2 = 15. Is this an equilibrium? How do you know? (b) For the rest of the problem you can now assume that rents are increasing in the population of each city. Specifically, assume r1(L1) = 4 * L1 and T2 (L2) = 8 * L2. Compute the equilibrium population of each city equilibrium rents.Two firms compete for hiring workers in the labour market.The equilibrium wage is w = alpha + beta(H1 + H2), where alpha, beta; > 0 are parameters,and Hi is the number of workers hired by firm i = 1; 2. Firm i's profit is(y - w) Hi, where y is the output per worker. Assume y > alpha . Firm i choosesHi to maximize its profit. Do the following: (a) Consider the two firms decideon Hi simultaneously. Derive the Nash equilibrium. (b) Consider the twofirms make decisions sequentially. Firm 1 gets to hire first, followed by firm2. Derive the subgame perfect equilibrium(3) Consider a production of a good, X. The market for X is competitive and thus there are many firms producing X. The production of X requires only labour inputs. Moreover, the marginal product of labour for X is constant. However, there are exactly two kinds of workers in the population. One kind has a constant marginal product worth $20 and the other kind has a constant marginal product worth $15. The labour market is competitive and there are equal numbers of workers of each kind in the population. (a) Suppose that the price of X is $1 per unit. The equilibrium wage rate for high- productivity workers is $ workers is $ and the equilibrium wage rate for low-productivity (b) Consider the case of information asymmetry: each firm cannot directly tell the difference between the two kinds of workers. Even after it has hired them, it won't be able to monitor their work closely enough to determine which workers are of which type. In this case, one wage rate will be offered to both kinds of…
- Wage W5 W4 W3 W₂ W₁ Q₂ Q3 Q 4 MFC S D = MRP Quantity of Labor Larry's Lumber Mill sells lumber in a perfectly competitive product market. However, Larry's Lumber Mill is the only employer of labor in the small community where it is located. The labor market is depicted by the graph above. (a) Using the labels from the graph above, identify each of the following. (i) The optimal quantity of labor Larry's Lumber Mill will hire (ii) The wage rate Larry's Lumber Mill will pay (b) Using the labels from the graph above, identify the number of workers Larry's Lumber Mill would hire if the labor market were perfectly competitive. (c) Because of growing housing demand, the price of lumber increases. What will happen to each of the following? (i) Larry's Lumber Mill's demand for labor. Explain. (ii) The supply of laborThere is a community of 400 commercial fishers, and there are two lakes where they can fish, ONE and TWO. Fishers choose the lake on which they fish. On ONE, the catch per fisher is 30 pounds, regardless of how many fishers choose ONE. On TWO the catch per fisher decreases as the number of fishers increases. Specifically, C, = 200 – N2, where N, is the number of fishers on TWO and C2 is pounds of fish caught by each fisher. Fishers' preferences: Fishers care about the quantity of fish they catch, the more they catch, the better off they are. In addition, if a fisher anticipates that the quantity of fish he would catch on ONE is identical to the quantity he would catch on TWO, he prefers to fish on TWO. (a) Why this problem is the Game Theory problem? (b) What is a strategy set for a representative player REP? (c) Let M be the number of fishers other than a representative, REP, who choose to fish on TWO. Construct a payoff table for REP in the game in which all 400 fishers choose a…Suppose there are two pharma companies (A and B) vying to develop the first vaccine to cure AIDS. Assume a fixed MC across the two firms MCA = MCB = 4. Assume further that they both face a market demand of P = 12 -0.00004Q and Q=QA + QB. (a) If firm A is able to enter the market first before firm B, what model would you use to depict this scenario? Why?