(1 point) Suppose the relation between CEO’s annual salary in thousands of dollars, salary, and the return on equity, roe, measured as a percentage, is estimated to be: . Now, suppose that salary is measured in hundreds of dollars, rather than in thousands of dollars, say, salarhun. What will be the OLS intercept and slope estimates in the regression of salarhun on roe?

There are many private companies selling life insurance and there is virtually no problem associated with that market. On the other hand, many people like insurance to smooth their income over the business cycle, especially people working in the growing gig economy where their alternating periods of employment and unemployment. But no one sells income insurance.

1. Why do competitive markets work better for life insurance than for income insurance?

2. Why are governments able to provide this type of insurance when private companies cannot provide it?

1. In a fractional reserve banking system, banks -------------

a. have the ability to influence the size of the money supply

b. don;t have the ability to influence the size of the money supply

c. can create both money and wealth in the economy

d. are obligated by the fed to keep all deposits as reserves

2. If you deposit $200 in the bank. If the reserve requirement ratio is 10%, what is the minimum amount of increase in the money supply in the economy?

a. $2000

b. $50

c. $10

d. $zero

3. Increasing the reserve requirement ratio---------------

a. reduces federal funds, which eventually increase the size of the money supply in the economey

b. reduces federal funds, which eventually reduces the size of the money supply in the economy

c. has no impact on the money supply

d. none of the above

PLEASE EXPLAIN QUESTION 2 HOW TO SOLVE

How does the Prisoner's Dilemma relate to oligopolies?

How does game theory (and the likely actions by the "players") change if the game is only played once as opposed to it being an on-going game?

24. 2) According to the quantity theory of money, how would a decrease in velocity affect AD?

If output is below the natural rate, explain why it would automatically fall through changes in the labor market.

Two shops A and B attract two types of customers: price-sensitive customers, who shop at the lower-priced shop, and time-sensitive customers, who shop at whichever shop is on their side of the street. A customer of either type purchases on average 10 goods. Assume there are 800 price-sensitive customers and 500 time-sensitive customers buying goods on any given day. The wholesale price the shop pay per good is $3. For simplicity, assume that they can charge $3.50, $4.00, or $4.50 per good.

a. Complete the matrix depicting each station’s profit given the possible strategy profiles.

b. Are there any dominant strategies or dominated strategies? Explain briefly.

c. Are there any pure-strategy Nash equilibrium? If so, give the strategy profiles and corresponding outcomes.

The U.S. has placed a 200% tariff on airplanes produced by Bombardier, a Canadian company, after Boeing complained that Bombardier was able to sell their planes to Delta Airlines (an American company) at a lower price. How is Boeing affected by this tariff? How is Delta Airlines affected by this tariff? How is the U.S. government affected? Is the U.S. better off or worse off?

Is the Sulfuric Acid market an oligopoly, monopolistic competition, or pure competition? How does Porter's Five Competitive Forces Model help you understand this market?

1. Recall that aggregate demand AD is determined by all of the components of desired aggregate expenditure.

COVID-19 has caused the global economic landscape to change very quickly. Furthermore, an oil price war involving Saudi Arabia and Russia has resulted in a dramatic decline in oil prices.

1. [1 point per row] For each of the events below, state which component(s) of aggregate demand is affected, provide a brief explanation, and whether the effect is an increase or decrease. The first is done as an example.

1. Based on the size and direction of the effects above, do you think that overall desired aggregate expenditure has increased or decreased? Would this result in a leftward or rightward shift in the AD curve?

24. If Japan had followed a Taylor Rule during the 1990s, would they have avoided their “lost decade”?

As a budding entrepreneur, you have purchased a small bagel shop. You have engaged in a market study to categorize your customers’ willingness to pay for a meal (coffee+bagel) into 8 equal sized groups: ($5.00, $4.50, $4.00, $3.50, $3.00, $2.50, $2.00, $1.50). All of your costs are fixed except labor and materials, which cost $2.25 per meal sold.

a) What price should you charge for a meal? (Hint: you don’t need to know the number of customers to answer this or part b)

b) Suppose your market research tells you that the four lowest value groups are all students. Should you offer a student discount? If so, how much?

c) If there are 100 daily customers from each consumer group, what is your shop’s profit gain from offering a discount to students relative to offering the same price to all customers?

d) If the fixed costs associated with the shop are salaries, a franchise fee, and rent, which are renewed and paid annually and average $500 per day, should the shop stay open in the long run? Does your answer depend on whether or not the shop offers a student discount?

1- If expected future exchange rate of Saudi Riyal (SAR) increases, what will happen to the exchange rate of SAR now? Explain with a GRAPH

2- Explain dollarization.

3. What are the functions of the IMF? What are the criticisms of the IMF?

4.Explain how price level affects exchange rates in the long run?

Sam is considering purchase of a vending machine to sell sodas. The cost of the vending machine is $3,400. Sam estimates that the vending machine will last for five years and will provide net income of $800 each year for its lifetime.
a. If Sam pays $3,400 for the vending machine today, what is its net present value at 7%? Should Sam purchase the vending machine?
b. If Sam pays $3,400 for the vending machine today, what is its net present value at 5%? Should Sam purchase the vending machine?
c. Suppose the seller of the vending machine allows Sam to defer, without penalty or interest, payment for the vending machine until the end of the first year. What is its net present value at 7%? Should Sam purchase the vending machine?

Suppose that for ABC Company we have the following functions:

    Inverse Demand Function:   P = 360 - 0.8Q

    Cost Function: 120 + 200Q

    Marginal Revenue Function (MR) = 360 – 1.6Q

    Marginal Cost (MC) = 200

Determine quantity (Q) and price (P) that maximizes profit for ABC Company. Show your calculations.

The demand and supply for a product is given by:

Qd: 300-5P Qs: 3P-100

Suppose the government imposes a tax T=$16

Calculate:

A) Consumer surplus after tax

B) Producer surplus after the tax

C) Government Revenue

D) Deadweight Loss