Questions
Tasha is choosing between 3 job offers. Job 1 is a salaried position that will pay...

Tasha is choosing between 3 job offers. Job 1 is a salaried position that will pay $50,000 with certainty. Job 2 is also a salaried job that pays slightly less, $48,400, but also includes a 50% chance that she will get a $4,500 bonus at the end of the year. Finally, Job 3 is paid on commission. Tasha expects that with probability 0.75 she will earn $62,500 and with probability 0.25 she will only earn $40,000.

a) Calculate the expected value of each job offer.

b) Which job is the riskiest choice for Tasha?

c) If Tasha is risk neutral, which job offer will she take?

d) If Tasha is risk loving, which job offer will she take?

Suppose Tasha’s utility function for income is given by  U=the square root of I

e) Calculate Tasha’s expected utility from each job offer.

f) Which job offer will Tasha choose?

g) What is Tasha’s risk premium for Job #3?

In: Economics

Many experts state that video is the future of content marketing. Do you agree with this...

Many experts state that video is the future of content marketing. Do you agree with this statement? Why or Why not? What are the Pros and Cons of this type of (video) content? Again, be sure to include information from the supplemental materials provided to you for this case to support your answer.

In: Economics

Explain the potential effects on the economic growth rate from a substantial increase in the number...

Explain the potential effects on the economic growth rate from a substantial increase in the number of skilled people of working age entering a country. use graphs

In: Economics

Regarding conventional factors of production (capital and labor) and technology a. Explain why conventional factors of...

Regarding conventional factors of production (capital and labor) and technology

a. Explain why conventional factors of production are considered rival, and hence exhibit high degrees of excludability

b. explain why technology is considered non rival, and hence exhibits low excludability

In: Economics

Is trade likely responsible for growing inequality across countries?

Is trade likely responsible for growing inequality across countries?

In: Economics

Based on the United States winners and losers from NAFTA and your understanding of trade between...

Based on the United States winners and losers from NAFTA and your understanding of trade between countries, argue who are the winner and losers in Mexico.

In: Economics

A sequential game A local bee-keeper derives net revenue z(h) from choosing a level of production...

A sequential game A local bee-keeper derives net revenue z(h) from choosing a level of production (number of hives) h given by z(h) = 4h − 2h 2 .

A nearby apple farmer also benefits from being next to the bee-keeper, because the bees help to polinate fruit trees. The value of the bees to the apple farmer is given by y(h) = 12h − 2h 2 .

(a) Show that the bee-keeper maximizes their net benefit by choosing h = 1, while the sum of benefits, y(h) + z(h), is maximized at h = 2.

(b) Suppose that the government has the power to impose a transfer from the farmer to the bee-keeper in amount t. The level of t is chosen after the bee-keeper decides on h. Additionally, the government wishes to maximize the sum of the logarithms of the payoffs of the the two parties, so that it solves max t ln(12h − 2h 2 − t) + ln(4h − 2h 2 + t).

i. Show that by choosing t taking h as given, the government optimally sets t = 4h.

ii. Show that this transfer scheme leads to the bee-keeper wishing to maximize z˜(h) = 8h − 2h 2 .

iii. What level of h will be chosen by the bee-keeper if they anticipate this payment? Show your reasoning.

(c) Would your answer to part (b)(iii) change if the government put less weight on the bee-keeper’s utility so that it solved, instead, max t ln(12h − 2h 2 − t) + 1 2 ln(4h − 2h 2 + t) ?

Justify your answer.

In: Economics

Distinguish between ‘fiscal’ and ‘monetary’. That is, what are fiscal activities and what are monetary activities?...

Distinguish between ‘fiscal’ and ‘monetary’. That is, what are fiscal activities and what are monetary activities? How are they separate things, and how are they interrelated? (Hint: The Federal Government does fiscal activity, while the Federal Reserve controls monetary activity.) The equation of exchange, MV = PQ, may be used to answer this question.

In: Economics

Please answer the following questions: Do you believe that companies have a moral duty to be...

Please answer the following questions:

  • Do you believe that companies have a moral duty to be socially responsible?
  • If doing so comes at a cost to the company, is that really a best business practice?
  • Where do you stand on the subject of social responsibility vs. company profit?

In: Economics

Let's assume that you are planning to open a new microbrewery in your city. Conduct an...

Let's assume that you are planning to open a new microbrewery in your city.

Conduct an environmental scan relevant to opening your microbrewery. What issues/problems/concerns do you need to be aware of for each of the following environmental forces?

  • Social
  • Economic
  • Technological
  • Competitive
  • Regulatory

In: Economics

How did the economic crisis of 1857 contribute to class conflict? To the outbreak of the...

How did the economic crisis of 1857 contribute to class conflict? To

the outbreak of the Civil War?

In: Economics

Let's assume that Coca-Cola has interest in developing a new drink for the United States. Identify...

Let's assume that Coca-Cola has interest in developing a new drink for the United States. Identify and describe one potential market segment who could be interested in this new drink. Identify your product strategy. Your product strategy will be specific to the market segment that you have identified.

In: Economics

Why is it important for an international firm to develop and maintain an effective accounting system?...

Why is it important for an international firm to develop and maintain an effective accounting system? What accounting issues are faced by firms with subsidiaries in multiple countries? How can these problems be addressed?

In: Economics

What is the governments position and some pros and cons from the T-Mobile and Sprint Merger?...

What is the governments position and some pros and cons from the T-Mobile and Sprint Merger? Please include a source for the information.

In: Economics

Consider a monopolist facing linear demand P(Q) = 16 – Q. Find the monopolist’s profit-maximizing choice...

  1. Consider a monopolist facing linear demand P(Q) = 16 – Q.
    1. Find the monopolist’s profit-maximizing choice of price and quantity if the total cost function is C(Q) = 8Q.
    2. Find the monopolist’s profit-maximizing choice of price and quantity if instead C(Q) = 2Q2. Note that this cost function yields exactly the same total cost as the original cost function C(Q) = 8Q for the monopolist’s optimal quantity in 2.1. Explain why the monopolist’s optimum quantity, however, is not the same in 2.1 and 2.2

In: Economics