Blog

Traditionally, the federal government provides disaster relief funds to flood victims so that they can rebuild their homes after a major flood. However, the government has recently denied requests to rebuild some homes that were situated in flood-prone areas. This action represents an attempt to ________ the moral hazard problem associated with building private homes in risky areas

Assume that both high and low quality appliances are sold in the used appliance market. If we assume asymmetric information with sellers having more information regarding quality than buyers, which of the following is necessarily true? The A) B) C) D) 

A market with few entry barriers and with many firms that sell differentiated products is

The line at “A” is pointing to the _______ tonsil, while the line at “B” is poitning to the  _______ tonsil

The string-like structures line “C” is pointing to are called  _______ while the line at “D” is pointing to the  _______ muscle

Consider the following payoff matrix for a game in which two firms attempt to collude under the Bertrand model:   Firm B cuts Firm B colludes Firm A cuts 6,6 24,0 Firm A colludes 0,24 12,12 Here, the possible options are to retain the collusive price (collude) or to lower the price in attempt to increase the firm’s market share (cut). The payoffs are stated in terms of millions of dollars of profits earned per year. What is the Nash equilibrium for this game?

The line at “A” is pointing to the Left _______ which is an external structure on the heart. 

Job market signals like dressing well for interviews are not especially effective because:

A monopolistically competitive firm in long-run equilibrium:

Assume that the owners of a firm know that the firm’s profits will depend upon two parameters: (1) how hard the managers work, and (2) the state of the economy. For simplicity, assume that the managers can exert either maximum or minimum effort and that the economy can be either favorable or unfavorable. The profits under various situations are represented by the matrix below.                                     Favorable             Unfavorable                                   Economy               Economy    Maximum Effort         700,000                 400,000 Minimum Effort         400,000                 200,000                                                                                         The firm considers there to be an equal probability of either state of the economy. The manager considers the cost of effort to be C = 55,000x, where x = 1 for maximum effort, 0 for minimum effort. The firm is considering the pay scheme described below. Evaluate each alternative in terms of their incentive effects for the manager and their effect on the firm’s profitability. a flat salary of $30,000 that is not tied to the firm’s performance a bonus of 0 if profit equals 200,000 or 400,000 and a bonus of 120,000 if profit equals 700,000 a bonus determined by the formula: B = 0.20(PROFIT – 300,000) a bonus determined by the formula: B = 0.24(PROFIT – 300,000)