2003finalpsoln - 2003 Final Examination - Partial Answers...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
2003 Final Examination - Partial Answers 1. PART B: 1. monopoly/oligopoly (a) Q M =200 ,P M =$600 , ε = 3 2 (b) P = $350 (c) R 2 ( q 1 ): q 2 = 200 2 5 q 1 (d) q S 1 =166 2 3 ,q S 2 =133 1 3 2. Cournot (a) t0 1 c -17,000 16,000 NPV = 2454 . 55 < 0 do not invest (b) E { P } =$22 (c) E { } = $3000 > 0invest (d) E { lease } =2000 > 0butlessthan( c ) . Invest today (e) E { lease } =4727 . 27 > 0 greater than E { today } , buy lease, delay invest- ment 3. insurance (a) graph (b) Mark will fully insure, buys $20,000 coverage, E { profits } =0 (c) graph. problem of moral hazard, Mark will say he has purchased the navigation system but won’t actually purchase it
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/21/2010 for the course STATISTICS Stat 200 taught by Professor Eee during the Spring '10 term at UBC.

Page1 / 2

2003finalpsoln - 2003 Final Examination - Partial Answers...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online