Consider the following three stocks that constitute a stock market index.

Market-cap-weighted index and price-weighted indexes would be most sensitive to which of these stocks and why?

Two firms compete by choosing price. Their demand functions are

Q_1=20-P_1+P_2 and Q_2=20+P_1-P_2

where P_1 and P_2 are the prices charged by each firm, respectively, and Q_1 and Q_2 are the resulting demands. Note that the demand for each good depends only on the difference in prices; if the two firms collude and set the same price, they could make that price as high as they wanted, and earn infinite profits. Marginal costs are zero.

a. Suppose the two firms set their prices at the same time. Find the resulting Nash equilibrium. What price will each firm charge, how much will it sell, and what will its profit be? (Hint: Maximize the profit of each firm with respect to its price.)

b. Suppose Firm 1 sets its price first and then Firm 2 sets its price. What price will each firm charge, how much will it sell, and what will its profit be?

c. Suppose you are one of these firms and that there are three ways you could play the game: (i) Both firms set price at the same time; (ii) You set price first; or (iii) Your competitor sets price first. If you could choose among these options, which would you prefer? Explain why.

• PLEASE ANSWER ALL OF THE QUESTION. PLEASE IN\DICATE THE QUESTION THEN THE ANSWER BELOW

• Reproduction

  A 33 year old woman and her 32 year old husband have been trying to have a baby for over a year. Unfortunately, they have not yet been able to conceive. The woman has been tracking her cycle and does not have a regular 28 day cycle. Both husband and wife are somewhat healthy, non-smokers and occasional drinker, although the women has given up drinking since they have started trying for a baby.

  1. Since the women does not have a regular cycle, you first want to determine if she is ovulating. You decide to test her hormonal levels.
  1. Where are gonadotropins produced?
  2. What hormones signal the production of gonadotropins?
  3. What hormones signal the release of gonadotropins?
  4. On which tissues do gonadotropins act in the female body?
  5. What hormonal surge causes ovulation?
  6. How is the hormonal surge produced?
  7. In what phase of the menstrual cycle does the surge begin to occur?
  8. How does the hormonal surge cause ovulation?
  1. You determine that the woman is not ovulating regularly, which is perhaps due to low levels of estrogen. After further investigation you determine that her family has a history of high cholesterol, she avoids eating many types of foods, including fats and cholesterol. This lack of cholesterol has lead to a loss of normal estradiol production, and an irregular menstrual cycle.   
  1. What structures produces estrodiol?
  2. How does cholesterol play a role in producing estrodiols?
  3. Production of which other hormones may have been affected by low cholesterol levels?
  1. The woman receives proper nutritional consultation and adjusts her diet in a healthy way. Her menstrual cycle becomes regular and her hormonal levels indicate that she is ovulating. You next determine whether she is actually ovulating. To do so, you use ultrasound imaging to survey her ovaries.
  1. What structure will be present if she has just ovulated?
  2. What hormone does it produce?
  3. What is the hormones role?
  4. What is the structure called after a few weeks post ovulation?
  1. The woman does in fact ovulate, so you now determine if her reproductive organs are also functioning and are properly formed.
  1. In which structure does conception occur?
  2. In which structure does implantation occur?
  1. The woman’s reproductive system is healthy and no longer presents any obvious issues. However, the couple are still not able to get pregnant. You now test the husband’s sperm.
  1. What role do the Leydig cells play in sperm production?
  2. What role do the Sertoli cells play in sperm production?
  3. Where is testosterone produced?
  4. What stimulates the production of testosterone?
  5. What prevents the production of testosterone?
  6. What role does the ejaculate play in maintaining sperm health?
  1. You determine that the husband does not have any sperm, dead or alive, in the ejaculate. You investigate if there is a problem with his reproductive structures.
  1. What structure links the testes to the urethra?
  2. What role does the blood-testes-barrier play in sperm production?
  1. You are able to determine that the husband has under developed vas deferens, preventing sperm release. You are able to retrieve healthy sperm and inseminate the woman.   

  Success! The couple is pregnant.

  1. Where are mature sperm stored?
  2. What hormone contributes to the development of the vas deferens?
  3. When does the development of the vas deferens occur?
  4. What structure would you look for to determine if the sperm was mature?
  5. How many chromosomes does mature sperm have?
  6. What hormone helps to maintain the pregnancy?
  7. How does it help to maintain the pregnancy?

Assume that a stock is trading at $100, and that it will pay a single cash dividend of $2 exactly one month from now. Interest rate = 1.5%. Calculate the 3-month forward price. If the 3-month put with strike K=$100 is worth $2. What would be the value of the call with the same strike?

Pricing with increasing returns to scale. Consider the following production function (similar to that used earlier for ColdAway):

Y = 100 * (L - F),

where Y is output, L is labor input, and F is a fixed amount of labor that is required before the first unit of output can be produced (like a research cost). We assume that Y = 0 if L < F. Each unit of labor L costs the wage w to hire.

(a) How much does it cost (in terms of wages) to produce five units of output?

(b) More generally, how much does it cost to produce any arbitrary amount of output, Y? That is, find the cost function C(Y) that tells the minimum cost required to produce Y units of output.

(c) Show that the marginal cost dC/dY is constant (after the first unit is produced).

(d) Show that the average cost C/Y is declining.

(e) Show that if the firm charges a price P equal to marginal cost, its profits, defined as π = PY - C(Y), will be negative regardless of the level of Y.

Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2017.

Lowell has a labor contract that calls for a wage increase to $9.00 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1.

Lowell expects to begin the year with 17,140 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month’s sales, plus 60% of the second following month’s sales.

A) Prepare a production budget for Lowell Company by month and for the first quarter of the year.

B) Prepare a direct labor budget for Lowell company by month and for the first quarter of the year

a.

Equity/value:

Debt/value:

b.

equity/value:

debt/value:

Sandboxes are produced according to the following cost function:

c(q) = q² + 100, where the fixed cost of 100 represents an annual license fee the firms pay. Every firm uses the same technology to produce sanboxes.

In the long run, what will be the equilibrium price?

The market demand for sandboxes is given by Q_D = 1500 – 5p. Find the long-run equilibrium market quantity?

The market demand for sandboxes is given by Q_D = 1500 – 5p. Find the long-run equilibrium number of firms?

Recent trends have increased the demand to Q_D=2250–5p. In the short run, what will be the new equilibrium price?

Suppose demand remains high at Q_D=2250–5p in the long run.  What will be the long-run equilibrium price?

Suppose demand remains high at Q_D=2250–5p in the long run.  What is the number of firms operating in the long run?

Suppose the operating fee is increased from 100 to 225. So now each firm has the cost function C(q)=q² + 225 In the long run, with the demand Q_D=2250–5p, what will be the equilibrium price?

1. Using the following data, the Consumer Price Index for 2011 and 2015 using the base 1982 = 100 ($1,210,000) are __________ and ________________.
2. In reality, the CPI is based on a larger basket of good. Assuming the following prices, the average annual inflation rate for the 33 years (1982-2015) is_______________
3. The core inflation rate is similar except that it excludes ___________ and ____________ prices because ___________________. The core rate is __________________
4. If the average rate of inflation is the expected to be the rate in the future and the nominal interest rate is 8% per year, the real rate of interest is______.

SHOW YOUR WORK PLEASE

1. Using the following data, the Consumer Price Index for 2011 and 2015 using the base 1982 = 100 ($1,210,000) are __________ and ________________.
2. In reality, the CPI is based on a larger basket of good. Assuming the following prices, the average annual inflation rate for the 33 years (1982-2015) is_______________
3. The core inflation rate is similar except that it excludes ___________ and ____________ prices because ___________________. The core rate is __________________
4. If the average rate of inflation is the expected to be the rate in the future and the nominal interest rate is 8% per year, the real rate of interest is______.