Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 21, Problem 5DQ
To determine
Economies of scale and merger of firms.
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A health study tracked a group of persons for five years. At the beginning of the study, 20%were classified as heavy smokers, 30% as light smokers, and 50% as nonsmokers. Resultsof the study showed that light smokers were twice as likely as nonsmokers to die duringthe five-year study, but only half as likely as heavy smokers.A randomly selected participant from the study died during the five-year period. Calculatethe probability that the participant was a heavy smoker
Consider two assets with the following returns:
State
Prob. of state
R₁ R2
1
23
13
25% 5%
2
-10% 1%
Compute the optimal portfolio for an investor having a Bernoulli utility of net returns
u(r) = 2√√r+ 10. Compute the certainty equivalent of the optimal portfolio. Do the
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In the graph at the right, the average variable cost is
curve ☐. The average total cost is curve
marginal cost is curve
The
C
Cost per Unit ($)
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A
0
Output Quantity
B
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