Consider the following input-output matrix for a closed model having two industries. [0.4 0.8 0.6 0.2 In what ratio should the industries produce? Select one: O 3:4 O 3:2 O 4:3 O 2:1 O 2:3 O 1:2
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- COURSE: MICROECONOMICS - Cournot Model:In the market for a given good there are only 2 firms satisfying the demand, and their respective total cost functions respond to the form: CTi = 10Qi + 5 and the demand is estimated to be: P = 31 - QIf the decision variable for both firms is that the quantity they will produce and realize will be decided simultaneously it is asked to:(a) calculate the profit and reaction function of each firmb) graph market equilibriumc) calculate the profits that both companies will obtain in equilibriumAssume that Facebook and Linkedin Companies have to decide whether to invest in the development of application. If they both develop successfully the new application, their profits will increase by 10 million a year. If only one develop the application, it will make 50 million a year in additional profits, whereas the profits of the other firm will drop by 15 million a year. If no firm develops the screen, the profits of the companies remains same which is 10 million. Based on given information, construct Matrix Representation of Facebook and Linkedin Companies game. In addition, based on given information, construct decision tree (Facebook choosesfirst)ned... ESS... 15 PPF2 Review Consider the diagram depicting the tradeoff faced by the Mars colony in production of spaceships or habitats. Suppose that the colony is currently producing nothing but spaceships. It is decided, however, that spaceship production should be reduced by one unit so that some habitats may be produced. How many habitats can then be produced if one spaceshift is foregone? 14 13 12 11 8 10 PPE 9 7 6 5 4 3 Review 2 1 0 Habitats 1 2 3 (3, 8) 4 (4, 6) 5 6 Close 7 Spacecraft 8 9
- A CNBC new story published 14 December 2021 reports, “OPEC and non-OPEC oil producers, an influential group known as OPEC+, decided on Thursday to stick to a previously agreed upon plan of hiking output by 400,000 barrels per day in January 2022. However the alliance said in a statement that “the meeting remains in session,” meaning they can “make immediate adjustments” should the current market conditions shift. In what was a hotly anticipated meeting, the energy alliance convened via videoconference to determine whether to stick with its plan to release more oil into the market or to restrain supply amid fears over the omicron Covid-19 variant. Other issues on the table included a U.S.-led release of strategic reserves from crude-importing nations and Iran’s possible re-entry into oil markets.” 1.Identify the market structure where OPEC operates 2.Discuss extensively 2 features of that market structure.-3 1 Consider the game defined by the matrix: P = 4 -3 IO 10 61 ooloulote the matrix RP to determineA4 1. Two chemical companies, A and B, operate in a small New England town. Every week A releases 40 gallons of dioxin into the town’s aquifer, while B releases 30 gallons during the same time frame. It would cost A $800 per gallon to clean up its production, while B can clean up its waste at a cost of $500 per gallon. After this issue is raised at a town hall meeting, the town’s residents vote to reduce total dioxin pollution to 20 gallons per week. a. What would be the total cost of pollution reduction if each company were limited to 10 gallons of waste per week? b. What would the total costs be if each company received 10 gallons worth of tradable pollution credits? 2. A wheat farmer and a cattle rancher occupy adjacent parcels of land. Every year the farmer builds a fence to keep the cattle out of his field, and every year the rancher tears the fence down so that the cattle can roam free. The farmer values the wheat that gets destroyed at $300, while the rancher values having a…
- Question Suppose Coca Cola and PepsiCo are producing a new, healthy version of Coke and Pepsi. They are trying to figure out how much of this new soda to produce. They know: (i) If they both produce 10,000 liters a day, they will make the maximum attainable joint economic profit of $200,000 a day, or $100,000 a day each. (ii) If either firm produces 20,000 liters a day while the other produces 10,000 a day, the one that produces 20,000 liters will make an economic profit of $150,000 and the other will incur an economic loss of $50,000. (iii) If both produce 20,000 liters a day, each firm will make zero economic profit. (a) Describe the payoff matrix for the game that Coca Cola and PepsiCo must play. (b) Find the Nash equilibrium of the game that Coca Cola and PepsiCo play.QUESTION 7 In the hotelling model, suppose firm 2 locates at 45 meters. Which of the following location choices for firm 1 gives highest profits? O 50 meters O 49 meters O 44 metersMary and Raj are the only two growers whoprovide organically grown corn to a local grocery store.They know that if they cooperated and produced lesscorn, they could raise the price of the corn. If theywork independently, they will each earn $100. If theydecide to work together and both lower their output,they can each earn $150. If one person lowers outputand the other does not, the person who lowers outputwill earn $0 and the other person will capture the entiremarket and will earn $200. Table 10.6 represents thechoices available to Mary and Raj. What is the bestchoice for Raj if he is sure that Mary will cooperate? IfMary thinks Raj will cheat, what should Mary do andwhy? What is the prisoner’s dilemma result? What is thepreferred choice if they could ensure cooperation? A =Work independently; B = Cooperate and Lower Output.(Each results entry lists Raj’s earnings first, and Mary'searnings second.)
- Consider the following sequential-move game: Player 1 Player 2 Player 3 Player 2 Player 3 R N LAF 3 E L 3 4 L R Player 1 Player 3 R EXE 5 L R L Pleaver g L Find the backward-induction equilibrium of this game. going 5 42" 5 44 Player 2 چلے Player 3 R O 5bok ences Suppose Toyota and Honda must decide whether to make a new breed of side-impact airbags standard equipment on all models. Side-impact airbags raise the price of each automobile by $1,000. If both firms make side-impact airbags standard equipment, each company will earn profits of $1.6 billion. If neither company adopts the side-impact airbag technology, each company will earn $0.6 billion. If one company adopts the technology as standard equipment and the other does not, the adopting company will earn a profit of $2.5 billion and the other company will earn $-0.8 billion. If you were a decision maker at Honda, would you make side-impact airbags standard equipment? SO No O There is not enough information to answer the question. O Yes 4 If Toyota and Honda were able to cooperate, would you expect this same outcome? O No O There is not enough information to answer the question. O YesQUESTION 8 Player 1 chooses between Up and Down. Player 2 observes this, then chooses between Up and Down herself. If both players choose the same action, they both get a payoff of 1. If they choose different actions, the player with Up gets 1 and the player with Down gets -1. How many (pure strategy) Nash equilibria are there in this game? O 3 O 4 QUESTION 9 In the Bertrand model, suppose that each firm has a marginal cost of £10 and that firm 1 sets a price of £9.99, which of the following a best-response for firm 2? Click all the correct answers. O £9.99 O £10.01 O £11.01 O £10.00 O £9.98 QUESTION 10 In the Lindahl model, if player 1 is honest and player 2 maximises his utility which of the following is true: O Player 2 has a higher utility than if both players had been honest. O The level of public good provided is more than that implied by the Samuelson rule. O Player 1 consumes more public goods than player 2.