Questions
Efficiency wages are defined as wages that are intentionally above market rates. This practice is sometimes...

Efficiency wages are defined as wages that are intentionally above market rates. This practice is sometimes cited within the macroeconomics literature as a basis for sticky wages in the short run. One explanation for efficiency wages derives from incomplete information. In a world of complete information, firms could structure compensation contracts to directly reward high effort and punish low effort. However, in a world of incomplete information, monitoring is difficult and costly.

Consider a worker that must make a choice between putting in high effort on the job and putting in low effort on the job (a.k.a. shirking). If the worker puts in high effort, he/she keeps the jobwith certainty and earns w. If the worker puts in low effort (shirks), then he/she earns G, the gain from shirking. The probability that the firm catches the worker shirking is f, in which case the worker is fired, and he/she must take a new job at the market wage m. If the firm does not catch the worker shirking, then he/she continues to earn w.

(a) Construct an extensive-form representation of this game where the firm makes the first move by offering a wage w.

(b) Write down the payoff to the worker from putting in high effort and the expected payoff to the worker from shirking.

(c) What incentive compatibility constraint must be met for the worker to choose to put in high effort?

(d) Describe the relationship between the firm’s optimal choice of w and G, all else equal.

(e) Describe the relationship between the firm’s optimal choice of w and f, all else equal.

In: Economics

Has the Federal Reserve done more harm than good? This is not a simple yes or...

Has the Federal Reserve done more harm than good? This is not a simple yes or no question. I need you to fully explain your answer with at least one source cited.


Response must be at least 250 words

In: Economics

2. Which of the following costs are always increasing as output increases? (a) Variable Cost only...

2. Which of the following costs are always increasing as output increases? (a) Variable Cost only (b) Fixed Cost only (c) Marginal Cost only (d) Total Cost only (e) Total Cost and Variable Cost

3.A firm has a Cobb-Douglas production function ? = 50√ ??. This function exhibits a constant return to scale. The total cost function for this production process is ? ? = ? · √ ?·? 50 , where ? is output level, ? and ? are prices of labor and capital. The marginal cost of production for this function is: (a) Constant. (b) Increasing. (c) Decreasing. (d) None of the above.

4. If some production function ?(?, ?) exhibits an increasing return to scale, then the marginal cost of production decreases as output level increases. (a) True. (b) False. (c) Not enough information given. (d) None of the above.

5. It will never cost more to produce a certain amount of output in the long run than in the short run. (a) True. (b) False. (c) Not enough information given. (d) None of the above.

In: Economics

why might it be better for governments to borrow money from foreign countries or entities than...

why might it be better for governments to borrow money from foreign countries or entities than borrowing domestically

In: Economics

Why is it important to study the internal resources, capabilities, and activities of firms? What insights...

Why is it important to study the internal resources, capabilities, and activities of firms? What insights can be gained?

In: Economics

The inverse market demand for clothing is P=48–2Q and the cost function is C=Q2. 1 Calculate...

The inverse market demand for clothing is P=48–2Q and the cost function is C=Q2.

1 Calculate the optimal profit of a monopolist.

Assume now that the monopolist can choose whether to continue operating in the market as a monopolist or set up two branches that operate in the market as Cournot duopolists (duopolist branching). Each branch will face the same quadratic cost function as the original monopolist.

2 Calculate the optimal profit under the duopoly branching. Will the firm prefer to produce with one or two branches? Explain whether this is counter intuitive.

3 Every unit of output Q generates a social cost of 10. The government chooses to pass on that cost to the firm as a lump sum to pay. In this situation, does the firm prefer to produce with one or with two branches operating as Cournot duopolists?

In: Economics

Income: The 5 boroughs: Manhattan, Bronx, Queens, Brooklyn, Staten Island. (Census) a)    Make a graph comparing the...

Income: The 5 boroughs: Manhattan, Bronx, Queens, Brooklyn, Staten Island. (Census)

a)    Make a graph comparing the poverty rate for all people in the 5 boroughs.

b)    Make a graph comparing the median 2016 household incomes in the 5 boroughs.

c)    Provide data analysis in 2-4 sentences

In: Economics

_____ 1. Which of the following statements about a monopoly is false? With price discrimination deadweight...

_____ 1. Which of the following statements about a monopoly is false?

  1. With price discrimination deadweight loss is smaller but consumer surplus is also smaller
  2. For a monopolized market to stay monopolized there have to be barriers to entry
  3. With a monopoly, price will equal marginal cost
  4. The more inelastic the demand, the higher the mark up of price over marginal cost

_____ 2. Which of the following statements about externalities is true?

  1. A positive consumption externality will result in over consumption. The government should subsidize consumers to fix it.
  2. If there's a negative production externality like pollution, the government should set a tax high enough so that the externality is completely eliminated
  3. With a positive externality in consumption social benefit is above private benefit
  4. Negative externalities create inefficiency but positive externalities improve it
  1. True or False
  1. In the long run, demand is more price elastic than in the short run

TRUE                                                              FALSE

  1. An increase in the number of firms will result in higher price and lower consumer surplus

TRUE                                                              FALSE

  1. If one country has absolute advantage in all goods then it cannot benefit from trade with another country

TRUE                                                              FALSE

  1. If the number of firms in the market increases then consumer surplus will go down

TRUE                                                              FALSE

In: Economics

In general,according to common law,first-degree murderers and second-degree murderers could be executed. true false

In general,according to common law,first-degree murderers and second-degree murderers could be executed.

true
false

In: Economics

. Complete the following: a. If the tax multiplier is -1, then the marginal propensity to...

. Complete the following:

a. If the tax multiplier is -1, then the marginal propensity to save is _________ the marginal propensity to consume.

b. If the government spending multiplier is 8, then the marginal propensity to save equals______.

c. If the marginal propensity to consume is two times the marginal propensity to save, then the government spending multiplier equals _______.

d. If the marginal propensity to save is 0.5, then the tax multiplier equals _______.

e. If the marginal propensity to save increases by 10 percent, then the government spending multiplier ________.

f. If the marginal propensity to consume goes from 0.8 to 0.85, then the tax multiplier _________.

g. If the tax multiplier increases (in absolute value) from -1 to -2, this means that the marginal propensity to consume has ______ relative to the marginal propensity to save.

h. If the government spending multiplier decreases from 5 to 4, this means that the marginal propensity to save has _______.

In: Economics

Discuss the objective of firm in production, also discuss the optimum level of inputs application in...

Discuss the objective of firm in production, also discuss the optimum level of inputs application in production for profit maximization to the firm and explain the three stages of return to scale in the production process.        

In: Economics

Explain the pshychology behind the suport and resistance levels that can be observed in price charts.

Explain the pshychology behind the suport and resistance levels that can be observed in price charts.

In: Economics

describe what effect value and pricing have on your decision-making process when you need or want...

describe what effect value and pricing have on your decision-making process when you need or want to buy something. Describe what effect pricing and value have on you when purchasing a Convenience Good versus a Shopping Good versus a Specialty Good.

In: Economics

Suppose that in a year, an American worker can produce 100 shirts or 20 computers, while...

Suppose that in a year, an American worker can produce 100 shirts or 20 computers, while a Chinese worker can produce 100 shirts or 10 computers. we can describe the production possibilities of the Americans and the Chinese in a table:

Output per Worker per year

U.S.

China

Shirts

100

100

Computers

20

10

Q1. (1pt) Which country has an absolute advantage in the production of each good?

Country

Reason

Shirts

Computers

Q2. (2 pts)Calculate the opportunity cost of producing each good for both countries. For example, to fill out the blank at the top-left corner. Answer this question: ‘In America, how many computers should they give up to produce a shirt?’ Don’t forget the proper unit. Show your work.

Opportunity Cost

U.S.

China

Shirts

Computers

Q3. (1pt) According to your answers in Q2, which country has a comparative advantage in shirts? Computers?

Country

Reason

Shirts

Computers

Q4. (2 pts) Now allow American and China to trade with each other. Suppose the terms of trade are 0.25 computers per shirt. What does this mean?

Questions

Answers

How many computers can be purchased with one shirt?

How many computers can be purchase with 100 shirts?

How many shirts can be purchased with one computer?

How many shirts can be purchase with 100 computers?

Q5. (3 pts) Suppose the U.S. and China produce the goods that they have comparative advantages and consider the trade with each other. With the ‘TOT is 0.25 computers per shirt’. Can trade occur? Are they willing to buy the good that they do not produce from the other country? Is this deal better off for both countries?

Q6. (5 pts) Now allow American and China to trade with each other. Find a mutually agreeable trade that makes each country better off than it was before it specialized. What is the range of TOT at which trade can occur?

Q7. (1 pt) List the determinants of the terms of trade. What do factors affect the level of the terms of trade?

In: Economics

Please explain the law of demand and law of supply with your good examples. Also explain...

Please explain the law of demand and law of supply with your good examples. Also explain all the changes that happen to the equilibrium price and quantity with numeric examples, when,

a. Demand curve shifts (to right and left)

b. Supply curve shifts (to right and left)

c. Both demand and supply curves move to the right at the same time

d. Both demand and supply curves move to the left at the same time

e. Explain with example the difference between change in demand and change in quantity demanded.

In: Economics