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Final%20Exam%20-%20PINK

# Final%20Exam%20-%20PINK - We have Q = 4,400/4 = 1100 10 t r...

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10 20 15 10 5 5 D ATC MC \$ Gizmos (Thousands of Units) Profit = TR – TC = PQ – ATC(Q) = (P – ATC)Q = (15 – 5)(20,000) = 200,000 Profit = TR – TC = PQ – ATC(Q) = (P – ATC)Q = (12 – 5.50)(26,000) = 169,000 EU(Use Drugs) = p(-400) + (1-p)(200) = p(150) + (1-p)(50) = EU(Don’t Use Drugs) 200 – 600p = 50 + 100p p = 150/700 = 0.214 or 21.4 percent EU(DRUG TEST) = p’(200) + (1-p’)(100) = p’(-200) + (1-p’)(200) = EU(NO DRUG TESTING) 100 + 100p’ = 200 - 400p’ p = 100/500 = 0.200 or 20.0 percent S) = 0.214 0.20 = 0.043 or 4.3 percent ting to random drug testing, the league reduces player drug use by 80 percent at relatively modest cost, testing only 21.4 percent of th | -2.46/1.56| < 2 We cannot reject the possibility that 3 may be equal to zero. 4 = ln QX/D I = ( QX/ I)(I/Q) = EQx,I % Qx = EQx,I %\$ I = 0.05 ± 10 = 0.50 of output. The inverse demand curve is P = 100 – ½Q. The firm may extract all consumer surplus with a membership fee equal to ½ Q = 4,400/4 = 1100 1,100) = 2,400,000 + 200(1,100) + (1,100)2 = 3,830,000 H: – 1,100 = 3,900 Profit = 3,900(1,100) – 3,830,000 = 460,000 – 1,100 = 1,900 Profit = 1,900(1,100) – 3,830,000 = -1,740,000 Profit = 0.8(460,000) + 0.2(-1,740,000) = 20,000 n = {(460,000 – 20,000)2(0.8) + (-1,740,000 – 20,000)2(0.2)}1/2 = 880,000 | MRTS| = MPL/MPK = 20/40 > 100/220 = w/r ve B. Jack, aware of this fact, will choose Move X. The joint outcome will be (55,70), or a payoff of 55 for Jill and 70 for Jack. he will opt for Move A. Jack’s response will be Move Z. The joint outcome will be (65,65), or a payoff of 65 for Jill and 65 for Jack. 4(10) = 60. If we bundle 60 units of output into a block, and charge a per unit price = (25 + 10)/2 = 17.50/unit, we have a block price eq We have: 4QA + 2QB = 1,850 2QA + 4QB = 2,500 Solving these two equations in two unknowns: QA = 200 and QB = 525. Q = 725. Pricing: PA = 2,350 – 200 = 2,150 and PB = 3,000 – 525 = 2,475 Total Revenue = 2,150(200) – 2,475(525) = 1,729,375 Total Cost C(725) = 800,000 + 500(725) + (725)2 = 1,688,125 Profit = 1,729,375 – 1,688,125 = 41,250 H F C A G 1 2 2 1 1 1 2 (150, 210) (160, 200) 2 (200, 220) (230, 170) 2 (200, 240) (150, 220) 2 (150, 150) (180, 100) E H G C F H G D E H A G F H G E H B G C F H G D E H RBlonds = MRBrunettes + 1/(-2.0))(30) = (1 + 1/(-1.5))PBrunettes Brunettes = 3(15) = 45 G F H nt random wealth satisfies = EU(W) 579.57 ount he would be willing to reduce his expected wealth to avoid risk, is: \$1,725,570.57 = \$728.43 premium which is at least equal to the expected loss: = 0.001(1,701,000) = \$1,701 willing to pay is: 429.43 S 10 5 0 5 10 20 15 P D Old = ½ (12)(12) – ½ (14)(14) = 72 – 98 = - 26 Old = ½ (12)(6) – ½ (14)(7) = 36 – 49 = - 13 TR = 3(12) = 36 PS + TR = -13 - 26 + 36 = -3 – 4(125) = 500. Profit = 500(125) – [10,000 + 600(125)] = 62,500 – 85,000 = -22,500. 800. In this case Profit = 800(50) – [10,000 + 600(50)] = 40,000 – 40,000 = 0. s revenue net of variable cost equals the area under the demand curve and above MC: ½ (1000 – 600)(100) = 20,000. To determine pro . His MRS = - 2 (288/16) = - \$36 per hour of leisure. Confronting a relative price of leisure in terms of income of \$36 per hour, Jose is /i = 112.5 + 45/i = D MD 5 – 50) = 5/62.5 = 0.08 or 8 percent Acme Gizmo has a monopoly in its market. Demand for its product, average total costs, and marginal costs of production are shown in the graph below: 1. If Acme Gizmo is a profit maximizing firm we would expect the firm to earn ________ dollars in profits. a) 120,000 b) 140,000 c) 160,000 d) 180,000 e) 200,000

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