Adam has wealth of $40,000 as long as his business does not burn down. However, there is a 30% probability that his business will burn down, causing a loss of $30,000 and leaving him with $10,000 of wealth. Adam's utility function is given by U = W^0.5 where W is wealth. Suppose Adam purchases insurance to cover the potential $30,000 loss. If the insurance premium is actuarially fair, Adam's utility with insurance is:

14.
Consider a monopoly facing the following demand, marginal revenue, total cost, and marginal cost curves:

Demand curve: P = 12 – 0.002 Q

Marginal revenue curve: MR = 12 – 0.004 Q

• Total cost curve: TC = 3Q +0.0005Q²

Marginal cost curve: MC = 3 + 0.001 Q

a. Calculate the profit maximizing output of this monopoly. Briefly explain your answer.

b. What is the socially efficient output level? Briefly explain your answer.

c. Suppose the government wants to adopt a price ceiling to induce this monopoly to produce at the socially efficient output level. Briefly explain what the level of this price ceiling should be and what will be the economic profit of this monopoly under this price ceiling.

Graph the nominal exchange rate of Italy in relation to the United States dollar.

Graph time on the horizontal axis and nominal exchange rates on the vertical access. You will want to compare this to Real Exchange rates, so see if you can plot them on the same graph - sometimes the scale is okay, sometimes not so much. Write a few sentences explaining what the graphs are telling you. A ten-year time frame is preferred.

Considering deregulation and how it affects agriculture or the California economy.

For example, economic regulation has limited the number of nurses and doctors based on the strict licensing regulations.

How would deregulation affect the quality of trained medical professional?

How has social regulation (through the requirement of health benefits for all employees) reduce the number of employees that have full time work?

6. Common resources and the tragedy of the commons

Larry, Raphael, and Alex are fishermen who live next to a lake that is open to fishing; in other words, anyone is free to use the lake for fishing. Assume that these men are the only three fishermen who fish in this lake and that the lake is large enough for all three fishermen to fish intensively at the same time.

Each year, the fishermen choose independently how many fish to catch; specifically, they choose whether to fish intensively (that is, to place several fishing lines in the water for long periods of time, which hurts the sustainability of the lake if enough people do it) or to fish nonintensively (which does not hurt the sustainability of the lake). None of them has the ability to control how much the others fish, and each fisherman cares only about his own profitability and not about the state of the lake.

Assume that as long as no more than one fisherman fishes intensively, there are enough fish to restock the lake. However, if two or more fish intensively, the lake will become useless in the future. Of course, fishing intensively earns a fisherman more money and greater profit because he can sell more fish.

The lake is an example of   because the fish in the lake are   and   .

Depending on whether Raphael and Alex both choose to fish either nonintensively or intensively, fill in Larry's profit-maximizing response in the following table, given Raphael and Alex's actions.

Which of the following solutions could ensure that the lake is sustainable in the long run, assuming that the regulation is enforceable? Check all that apply.

Outlaw intensive fishing.

Develop a program that entices more fishermen to move to the area.

Convert the lake to private property, and allow the owner to sell fishing rights.

Why does the definition of a pure public good imply that its benefits are not subject to congestion?

The City of San Antonio is considering various options for providing water in its 50year plan, including desalting. One brackish aquifer is expected to yield desalted water that will generate revenue of $4.1 million per year for the first 4 years, after which less production will decrease revenue by 10% per year each year. If the aquifer will be totally depleted in 23 years, what is the present worth of the desalting option revenue at an interest rate of 8% per year?

Play the game " the fiscal ship"

1) List two of your main goals in "The Fiscal Ship" and why they are important to you.

2) What are the two largest or most important policy changes that you made in “The Fiscal Ship”? How did these affect the budget?

CAn you help me with reduce inequality and invest to the future

Fill in the blanks.

Players,(....) , and payoffs are the defining characteristics of a game. At the Nash equilibrium of a game, everyone is playing a (....) .

A firms long-run supply curve is the portion of the [... ] cost that is above the marginal cost curve. The long-run competitive market equilibrium price must be such that all firms earn zero profit because [ ... ] .

If [.......] is greater than marginal cost the firm can increase profits by producing more output.

The following is an example of a source of monopoly power: [ ......] . The monopoly market output is inefficient due to [...] .

Amusement parks generally charge a lower price for admissions for children; this is an example of [.. ] price discrimination. If the amusement park could charge every individual their exact willingness to pay then this would be [ ...... ] price discrimination.

Describe an example of a real-world industry or market that would be considered by economists to be a natural monopoly.

1. What characteristics of the industry make it a monopoly?
2. What is the impact of the monopoly power on its customers?
3. Why might government want to regulate natural monopolies?
4. How might such regulation be structured?

State and prove Walras' law.

Consider the new Starbucks in Bethlehem. Suppose the wage is w = $9, and the cost of capital is r = $1, and their production function for cups of coffee is q = 4K^0.5L^0.5

a) What is the least/minimum cost of inputs combination required to produce 120 cups of coffee?

b) What would be the total cost of producing 120 cups of coffee?

c) Suppose instead that capital was fixed at 25 units. What would be the implications for labor usage maintaining q = 120?

d) Keeping capital fixed at 25 units. What would be the implications for total cost maintaining q = 120?

To address the Covid Virus situation, government has implemented restrictions that have

prevented many from working. Modeling this as a decrease in the labor supply, present an

analysis (using the IS-LM curves, AS-AD diagram, and labor market diagram) to show the

impacts we should expect from the Classical perspective. (That is, assume the nominal wage

adjusts to provide full employment.) For results, show in your analysis the restrictions are

predicted to impact the employment level, nominal wage level, real wage level, output level, price

level, and real interest rate level.

China was an original signatory to GATT, but after the communist revolution the Nation Government of China retreated to Taiwan as the Communist Party of China took over the mainland to from the People's Republic of China. Approximately a year later, the National Government decided to withdraw From GATT to prevent the communist government from enjoying the benefits as a GATT party. The PRC did not attempt to keep its Status.

   Decades after its establishment, the PRC attempted to rejoin the International trading Body, and then its successor, the WTO. What benefits did China expect to derive from re-engaging with the organization? What benefits did the existing members anticipate. Where their respective expectations met in your opinion? Please explain.