Provide KSF analysis for any industry of your choice ( but the tyre industry can not be used).

Policy Memo 2 Oneandonly Cable Company

Background: You work for the Public Utility Commission (PUC) in the City of Solo, Utah with a population of 150,000 people. The Oneandonly Cable Company is the only cable company licensed to operate in Solo. Most of Oneandonly’s costs are access fees and maintenance expenses. These fixed costs total $640,000 monthly. The marginal cost of adding another subscriber to the system is $2 per month. Oneandonly’s demand curve can be determined from the following data: Subscription Price (per month) Number of Subscribers (per month) $25 20,000 $20 40,000 $15 60,000 $10 80,000 $5 100,000 $2 112,000 The people in the City of Solo are complaining that their $15/month subscription price Oneandonly is currently charging is too expensive. As an analyst for the Public Utility Commission, you have been asked to consider the following options to address the citizen’s concern:

1. Force average cost pricing on Oneandonly. 2. Force marginal cost pricing on Oneandonly. 3. Leave things as they are. You have been asked to prepare a brief memo for the PUC analyzing these three policy options. Specifically, PUC would like for you to consider the following in your analysis for each policy option.  What is the price of a monthly subscription?  What are the profits or losses Oneandonly is making?  Is Oneandonly likely to stay in business?  Is this the most efficient market solution? Your memo should address each of the impacts requested above and should include a recommendation as to which policy (if any) the PUC should support. In addition, you are welcome to propose another policy if you have one. As the contents of your memo will be used to prepare the PUC for a decision they will need to explain to the public, it is important that this information be presented in a direct, non-technical manner that is accessible to non-economists. As such, the PUC has asked that you limit your analysis to two pages and to limit the use of economic jargon. Be sure to include a table summarizing your results. Since the PUC does have economic training, it is allowable to supplement your two-page memo with additional tables that illustrate your analysis. However, any explanations provided in the memo itself must be presented in a way that allows the PUC to convey the information to others in a nontechnical manner. Hints to get you started:  Expect to make a table with more information, such as TFC, MC, etc., for any supplemental tables you would like to turn in. However, all of this information may not easily understandable for the policy memo (2-page) part, so consider what information to include in your memo table carefully.  I recommend Excel or another spreadsheet software to carry out the calculations.  In class we have been calculating marginal revenue assuming there is one unit change in quantity. The equation for marginal revenue is the change in total revenue divided by the change in quantity

A purely competitive wheat farmer can sell any wheat he grows for $10 per bushel. His five hectares of land show diminishing returns, because some are better suited for wheat production than others. The first hectare can produce 1000 bushels of wheat, the second hectare 900, the third 800, and so on. Fill in the table given below to answer the following questions. How many bushels will each of the farmer’s five hectares produce? How much revenue will each hectare generate? What are the TR and MR for each hectare?

If the marginal cost of planting and harvesting an hectare is $7,000 per hectare for each of the five hectares, how many hectares should the farmer plant and harvest?

_________hectares

Expected

-

utility theory tells us that a risk

-

averse individual would want to be paid

a risk premium to induce

her

to voluntarily accept risk. Or, alternatively, the risk

-

averse individual would have to be offered odds that were in

her

favor in order to

induce h

er

to gamble. Here, “odds” refer to the probability of loss/gain and/or the

magnitude of the loss/gain.

Ms

.

Jane’s

utility function is U(

I

) =

(

10

0

+

I

)

0.

4

5

, where

100 is her initial income

level and

I

is

additional income gained or lost from a gamble. Ms.

Jane

can

choose not to gamble or to gamble.

The gamble involves the roll of a fair dice. If

the number is e

ven Ms.

Jane

wins $100 but if it is odd Ms.

Jane

loses $100.

(i)

Will Ms.

Jane

choose the gamble?

(ii)

In words, briefly describe what would need to change to induce Ms.

Jane

to take the gamble

(

hint

: focus on the characteristics of the gamble not her

preferences).

HOW DO CHANGES IN THE ECONOMY AFFECT THE OBJECTIVES OF UNIONS?

19. Gold, silver, and cigarettes in a prisoner of war are all examples of commodity money.

True

False

20. A devaluation is a reduction in the official value of a currency.

True

False

21. Specialization means that a country devotes its energy and resources to only a small proportion of the world’s productive activities.

True

False

22. Under the Bretton Woods system of fixed exchange rates, the price of the U.S. dollar was fixed in terms of gold and the prices of all other currencies were fixed in terms of dollars.

True

False

23. The United States was among the first of the modern industrial nations to establish a central banking system.

True

False

24. At higher interest rates, banks will want to hold more reserves.

True

False

13. Bankers’ decisions on how much to hold in reserves influence the supply of money.

True

False

14. Inflation increases the use of money as a store of value.

True

False

15. Labor is defined as cheap only if its productivity is very low.

True

False

16. A credit card is a form of money.

True

False

17. Exports are goods produced domestically and sold abroad.

True

False

18. When the dollar depreciates, the prices of imported inputs rise, and the U.S. aggregate supply curve, therefore, shifts inward, pushing up the prices of American-made goods and services.

True

False

Not all externality problems can be solved by the private sector. True or False? Explain your answer making reference to the Coase Theorem.

Illustrate and explain why economists prefer taxes rather than regulations as a means of dealing with negative externalities.

You have the option to produce different versions of a product or service: high quality, or
low quality. The marginal cost to produce the low quality version is $3 and the marginal
cost to produce the high quality version is $15. There are two types of consumers Type
A and Type C with 100 consumers of each type. Each consumer will buy at most one
version of the product. These consumers have the following willingness to pay:

1. Suppose you were to offer only the low quality version. Find the optimal price and profit. Show/Explain why these are the optimal prices/profits.

2. Suppose you were to only offer the high quality version. Find the optimal price and profit. Show/Explain why these are the optimal prices/profits.

3. Suppose you offer high and low quality versions. Find the optimal prices and profit.

• what 3 concepts (in your opinion) are the most important to Consumer Behavior?
• What Consumer Behavior concept (does not have to be in our top 3 from above) is the most germane to your job or personal life? I know there are a few concepts I employ with my son to get him to do what I need him to do...

Use your own words (300 words +)

What is the effect of avaiation sector and maritime in corona vires related in ASEAN

Discuss four reasons why a labour market may not allocate labour efficiently. Include in your answer an example for each of the four reasons

If you live in a country with a political system that you are against(or you're not satisfied with it)

what political parties/movements would you use in order to change the current political system? Give a real life example

A traditional-furnace costs $224 and consumes $155 per year in fuel over its 11 year lifetime. A condensing-furnace costs $440 and consumes $80 per year in fuel over its 11 year lifetime. If interest rates are12% per year, which is the better investment?