Gen Combo Managerial Economics & Business Strategy; Connect Access Card
9th Edition
ISBN: 9781260044294
Author: Baye
Publisher: MCG
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Chapter 7, Problem 20PAA
In 2006. the five leading suppliers of digital cameras in the United States were Canon. Sony, Kodak. Olympus. and Samsung. The combined market share of these five firms was 60.9 percent. The leading firm was Canon, with a market share of 18.7 percent. The own
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Use a Eviews software to develop the residual diagnostic on:
1) Autocorrelation (Topic 6)
a) Explain what is Autocorrelation
b) Explain how to remove the Autocorrelation
c) Report the result on Durbin Watson test before and after consider the lag dependent
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Section 1
Answer all questions. Show all your workings.
(a) Suppose there are two firms 1 and 2, whose abatement costs
are given by c₁(e₁) and c₂ (e₂), where e denotes emissions and
subscripts denote the firm.
We assume that c{(e;) 0 for i = 1,2 and for any
level of emission e we have c₁'(e) # c₂'(e).
Furthermore, assume the two firms make different contributions
towards pollution concentration in a nearby river captured by the
transfer coefficients ε₁ and 2 such that for any level of emission
e we have 2(e) +2 The regulator does not know the resulting
C₁'(e) Τι
environmental damages. Using an analytical approach explain
carefully how the regulator may limit the concentration of
pollution using (i) a Pigouvian tax scheme and (ii) uniform
emissions standards. Discuss the cost-effectiveness of both
approaches to control pollution.
[200 marks]
(b) "Whether the regulator sells or gives away tradeable emission
permits free of charge, the quantities of emissions produced by
firms are the…
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- Section 1 Answer all questions. Show all your workings. (a) Suppose there are two firms 1 and 2, whose abatement costs are given by c₁(e₁) and c₂ (e₂), where e denotes emissions and subscripts denote the firm. We assume that c{(e;) 0 for i = 1,2 and for any level of emission e we have c₁'(e) # c₂'(e). Furthermore, assume the two firms make different contributions towards pollution concentration in a nearby river captured by the transfer coefficients ε₁ and 2 such that for any level of emission e we have 2(e) +2 The regulator does not know the resulting C₁'(e) Τι environmental damages. Using an analytical approach explain carefully how the regulator may limit the concentration of pollution using (i) a Pigouvian tax scheme and (ii) uniform emissions standards. Discuss the cost-effectiveness of both approaches to control pollution. [200 marks] (b) "Whether the regulator sells or gives away tradeable emission permits free of charge, the quantities of emissions produced by firms are the…arrow_forwardExotic Coffee for the Poor? What a Genius Idea! you are a business consultant at a coffee shop. Your team leader came to you one morning with excitement on her face and told you, "Guess what? I have an idea for a great location for our next coffee shop. Think about it, Riceville is a city that has 150,000 people. Most of them are above the age of 16, which means they are potential coffee drinkers. Well, even though the majority of people in that city are making minimum wage and are considered poor, but the good news is that there are no coffee shops in Riceville and the only places you could get coffee there either restaurants or gas stations. What do you think?" Knowing that your company’s average drink price is $5.50, and the stores have nice sit-down areas and offer free WIFI and study spaces: What type of information about consumers in that area do you need to gather and understand to determine if people there will actually consume your coffee? How do the concepts of “budget and…arrow_forward(c) Assume an infinite horizon, continuous time and certainty. Furthermore, assume an additively separable utility function in consumption C and pollution stock S so that, U(C,S) = u(C) + v(S), where uc > 0; Ucc 0. Note that the first derivative, and the second subscript denotes the second derivative. The evolution of the pollution stock S over time is a function of consumption, decay rate of the stock of pollution & and abatement through the function, g(S) with gs > 0 and 9ss < 0. Time subscripts are ignored for ease of notation. Show that in the case of a stock pollutant, the marginal utility of consumption should equal the present value of disutility associated with the pollution stock. Interpret the condition.arrow_forward
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