An investor is considering investing in 2 movies: Love Forev…

An investor is considering investing in 2 movies: Love Forever and The Fighter. There is 30% chance that romance movies will be a hit and 40% chance that action movies will be a hit. There is another 30% chance that there will be a recession in movie industry. Since an action movie costs more on special effects, it brings more benefit when it is a hit while loses more when there is a recession. The following table summarizes the profits in each situation. Which of the following analysis is correct?

For the next 4 questions, use the following scenario: The fi…

For the next 4 questions, use the following scenario: The first table presents a polluting firm’s private benefit/cost functions and social benefit/cost functions. The second table presents four scenarios of the tradeable pollution permits market. Production Quantity MSB=MPB   MPC   MSC 1 $60 $15 $45 2 55 25 55 3 50 35 65 4 45 45 75 5 40 55 85 6 35 65 95 7 30 75 105     Tradable Pollution Permit Scenarios Firm’s endowment of Permits Market Price per Permit Scenario A 1 permit $40 Scenario B 2 permits $30 Scenario C 3 permits $20 Scenario D 4 permits $10  

Suppose a politician has a power to regulate the monopolist…

Suppose a politician has a power to regulate the monopolist in the figure below. The monopolist, currently charges Price PM, produces QM units of output and earns a profit. If consumers could persuade the politician to regulate the monopolist’s price at the competitive level PC , the result would be an output of QC . Find the area that represents the maximum amount that consumers are willing to spend on lobbying the politician.