Q3 Use the following production possibilities frontier for a country to answer the following questions.Which point(s) are unattainable? Briefly explain why.Point A because it is inside the production possibilities frontier.All the points because the production of each has an opportunity cost.BEPoint E because it is outside the production possibilities frontier.None of the points because they all are feasiblePoints B, C, and D because they are on the production possibilities frontier.Which point(s) are efficient? Briefly explain why.Points A, B, C, and D because they are attainable.Points B, C, and D because this is where maximum output is produced with available resources.PPEPoint A because it is inside the production possibilities frontier.Point E because it is where the most capital and consumption goods combined are produced.Consumption goodsPoint B because it is where the most resources are used to produce capital goods.Capital goods.....ООООО

The production possibility curve is used to analyze the maximum amount of output that can be…

Answered: Use the following production…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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…
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 $1
A computer reseller needs to decide how many laptops to order next month. The lowest end laptop costs $220 and the retailer can sell these for $300. However, the laptop manufacturer already announced that they are coming out with a new model in a couple of months. Any laptops that will not be sold by the end of next month will have to be heavily discounted at half-price. The reseller also needs to consider that every time he fails to fulfill a laptop order, he stands to lose $25 for every unit. Based on the past months’ sales, the reseller estimates the demand probabilities for sales (S) as follows: P(0 units) = 0.3; P(1 units) = 0.4; P(2 units) = 0.2; P(3 units) =0.1. The reseller thinks it’s a good idea to conduct a survey on whether or not his customers are going to buy laptops and how many. The survey results will either be Yes (Y), No (N) or Don’t Know (DK). The probability estimates of the results based on the demand for number of units are: P(Y|S = 0 units) = 0.1 P(Y|S = 1…
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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?
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. ....

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