econ4697 hw1

econ4697 hw1 - viewing. The table below shows the choices...

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ECON 4697 IO & Regulation Spring 2008, Homework 1, Due February 14 Q1. BRMC’s production function is Q=K ½ L 2 where Q is quantity of output, K is units of capital and L is units of labor. Carefully sketch an isoquant for _ Q = 10 in (K, L) space. Is the isoquant convex/concave to the origin? Q2. Given your answer to Q1 above, what does convexity imply in terms of the underlying production technology facing the firm? Q3. HBO and Showtime each offer one pay-per-view boxing match for cable TV subscribers per month. Prices have been set but the time is as yet undecided. Research reveals that 80 percent of the consumers for boxing events prefer to view the event in the evening (pm). The other 20 percent prefer a morning (am)
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Unformatted text preview: viewing. The table below shows the choices and payoffs for the one-shot simultaneous, game with complete information. Clearly define the players, choices and payoffs for this game. What is the Nash equilibrium? Showtime am pm am 10, 10 20, 80 HBO pm 80, 20 40, 40 Q4. (a) Cabral (2000; p. 63): review & practice question 4.3. For (i), what is the Nash equilibrium? (b) C abral (2000; p. 63): review & practice question 4.3. For (ii), what is the Nash equilibrium? Q5. Cabral (2000; p. 83): review & practice question 5.2 (hint : take a look at the Lerner Index of market power)....
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This note was uploaded on 03/31/2008 for the course ECON 4697 taught by Professor Savage during the Spring '08 term at Colorado.

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