The late 19th century city was often dense, crowded, and dirty. This often led to disease and sometimes death in places like Manhattan. Group of answer choices True False
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Industrialization was the rapid growth period of the economies because, under the industrial revolution, many economies speed up their economic growth.
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- A reserve price is a minimum price set by the auctioneer. If no bidder is willing to pay the reserve price, the item is unsold at a profit of $0 for the auctioneer. If only one bidder values the item at or above the reserve price, that bidder pays the reserve price. An auctioneer faces two bidders, each with a value of either $60 or $160, with both values equally probable. Without a reserve price, the second highest bid will be the price paid by the winning bidder. The following table lists the four possible combinations of bidder values. Each combination is equally likely to occur. On the following table, indicate the price paid by the winning bidder with and without the stated reserve price. Bidder 1 Value Bidder 2 Value Price Without Reserve ($) ($) ($) $60 $60 $60 $160 $160 $60 $160 $160 Probability 0.25 0.25 0.25 0.25 Without a reserve price, the expected price is $ expected price is larger_ the reserve price. Price with $160 Reserve Price With a reserve price of $160, the…An advertisement in the local paper offers a "fully loaded" car that is only six months old and has only been driven 5,000 miles at a price that is 20 percent lower than the average selling price of a brand new car with the same options. This low price is likely indicative of what type of situation? a) Adverse selection b)Moral hazard c) Winner's curse d) Perfect informationso the given answer is erronous?
- John wants to buy a used car. He knows that there are two types of car in the market, plums and lemons. Lemons are worse quality cars and are more likely to break down than plums. John is willing to pay £10, 000 for a plum and £2, 000 for a lemon. Unfortunately, however, he cannot distinguish between the two types. Sellers can offer a warranty that would cover the full cost of any repair needed by the car for y ∗ years. Considering the type and likelihood of problems their cars can have, owners of plums estimate that y years of guarantee would cost them 1000y, owners of lemons estimate that the cost would be 2000y. John knows these estimates and decides to offer £10, 000 if a car comes with y ∗ years of warranty, £2, 000 if a car comes without warranty. For which values of y ∗ is there a separating equilibrium where only owners of plums are willing to offer the y ∗ -years warranty? Clearly explain your reasoning.You have just received a report suggesting that a chemical your company uses in its manufacturing process is very dangerous. You have not read the report, but you are generally aware of its contents. You believe that the chemical can be replaced fairly easily but that if word gets out, panic may set in among employees and community members. A reporter asks if you have seen the report, and you say no. Is your behavior right or wrong? Explain.Suppose that every driver faces a 2% probability of an automobile accident every year. An accident will, on average, cost each driver $14,000. Suppose there are two types of individuals: those with $112,000.00 in the bank and those with $3,500.00 in the bank. Assume that individuals with $3,500.00 in the bank declare bankruptcy if they get in an accident. In bankruptcy, creditors receive only what individuals have in the bank. Assume that both types of individuals are only slightly risk averse. In this scenario, the actuarially fair price of full insurance, in which all damages are paid by the insurance company, is . Assume that the price of insurance is set at the actuarially fair price. At this price, drivers with $112,000.00 in the bank likely buy insurance, and those with $3,500.00 in the bank likely buy insurance. (Hint: For each type of driver, compare the price of insurance to the expected cost without insurance.) Suppose a state law has been passed…
- A total of 10 players are each choosing a number from {0,1,2,3,4,5,6,7,8}. If a player's number equals exactly half of the average of the numbers submitted by the other nine players, then she is paid $100; otherwise, she is paid 0. Solve for the strategies that survive the IDSDS.QUESTION 8 Kelly and Shawn are both looking to sell their own car. Both cars are exactly the same and are in good condition. However, Kelly's car has a road worthy certificate whereas Shawn's car does not. Select the item from the list provided to make the following statements true. ✓ Kelly's car's road worthy certificate signals to buyers that the car 1. adverse selection is safe and functioning properly. This is an example of 2. trust ✓ A buyer will have to rely on such signal because of ✓ Kelly asked her brother, Thomas to help her sell her car instead. Kelly intends to sell the car for $12,000 in one months time and will give $1,000 to Thomas as commission. However, Thomas proceed to wait for 3 month so that he could sell the car for $13,000 and take in the extra cash for himself. This is an example of 3. asymmetric information 4. marginal benefit 5. principal-agent problem 6. expected value 7. risk loving 8. costly to fake principle 9. risk neutral 10, moral hazard 11, marginal…Suppose that every driver faces a 2% probability of an automobile accident every year. An accident will, on average, cost each driver $7,000. Suppose there are two types of individuals: those with $42,000.00 in the bank and those with $1,750.00 in the bank. Assume that individuals with $1,750.00 in the bank declare bankruptcy if they get in an accident. In bankruptcy, creditors receive only what individuals have in the bank. Assume that both types of individuals are only slightly risk averse. In this scenario, the actuarially fair price of full insurance, in which all damages are paid by the insurance company, is $ Assume that the price of insurance is set at the actuarially fair price. At this price, drivers with $42,000.00 in the bank likely v buy insurance, and those with $1,750.00 in the bank likely buy insurance. (Hint: For each type of driver, compare the price of insurance to the expected cost without insurance.) Suppose a state law has been passed forcing all individuals to…
- How might imperfect information impact price? Group of answer choices Because buyers cannot determine the true quality of a product, they might tend to bid up the prices. Because they might not be able to present all the information about a product, sellers might temporarily lower the price to make potential buyers think the product is of excellent quality. Imperfect information might tend to cause prices to be perfectly elastic. Buyers cannot distinguish which goods have a higher quality and might be less likely to pay higher prices for that good.How does moral hazard apply to seat belt laws and helmet laws?
