Phineas receives $100 per week from his parents. He spends his entire income on two goods: Sprite (which cost $2 each) and chicken burgers (which cost $4 each). a) (8 points) Draw Phineas's budget constraint. Suppose that Phineas decides to purchase 20 Sprites and 20 chicken burgers this week. Is this choice within Phineas's opportunity set? Explain and show this choice on your graph. (Do not forget to label the axes of your graph)

b) (2 pts) What is the opportunity cost of purchasing a chicken burger?

c) (2 pts) If the opportunity cost of purchasing a chicken burger has decreased, which of the following would have increased: his income or the price of a chicken burger or the price of a Sprite?

Phineas receives $100 per week from his parents. He spends his entire income on two goods: Sprite (which cost $2 each) and chicken burgers (which cost $4 each). a) (8 points) Draw Phineas's budget constraint. Suppose that Phineas decides to purchase 20 Sprites and 20 chicken burgers this week. Is this choice within Phineas's opportunity set? Explain and show this choice on your graph. (Do not forget to label the axes of your graph)

b) (2 pts) What is the opportunity cost of purchasing a chicken burger?

c) (2 pts) If the opportunity cost of purchasing a chicken burger has decreased, which of the following would have increased: his income or the price of a chicken burger or the price of a Sprite?

Can you price a corporate bond issued by the reference entity of the following features: face value of 100, …xed coupon rate of 7% paid quarterly, maturity of 6 years? Let us assume the default recovery of the bond is 40% of its face value. Show you work and result in a separate worksheet. It takes a bit research and imagination to …nish your assignment. A bit hint: the price of the bond is the present values of its all expected future cash ‡ows: coupons and principal in case of non-default and recovery payment in default. What you need to do is simply attach the appropriate probabilities to each of them.
 A question: which type of model, structural or reduced form, should be more accurate in terms of pricing credit securities?

A perfectly competitive market exists for wheat. The inverse demand is P = 100-Q
where P is the price of wheat and Q is the total quantity of wheat. The private total cost for
the unregulated market to produce a quantity of Q is 50+80Q +0.5Q^2. The production of
wheat creates some pollution where the total externality cost is EC =Q^2.

Task 1: Solve for the free market competitive equilibrium of wheat.

Task 2: Solve for the socially optimal level of wheat. Illustrate it in the graph.

Task 3: Derive the Pigouvian tax (per unit of output of wheat) that results in the social optimum..

Task 4: One big company, WheatsRUs, buys out all the farmers of wheat and becomes
a monopolist. Using the same demand and cost information, solve for the quantity and
price under the unregulated monopolist.

A perfectly competitive market exists for wheat. The inverse demand is P = 100?Q where P is the price of wheat and Q is the total quantity of wheat. The private total cost for the unregulated market to produce a quantity of Q is 50+80Q +0.5Q 2 . The production of wheat creates some pollution where the total externality cost is EC = Q 2 .

Task 1: Solve for the free market competitive equilibrium of wheat.

Task 2: Solve for the socially optimal level of wheat. Illustrate it in the graph.

Task 3: Derive the Pigouvian tax (per unit of output of wheat) that results in the social optimum.

Task 4: One big company, WheatsRUs, buys out all the farmers of wheat and becomes a monopolist. Using the same demand and cost information, solve for the quantity and price under the unregulated monopolist.

1. Consider a firm whose technology can be represented by the following Cobb-Douglas production function: , f(L,K) = L^0.5K^0.5, where L and K represent labor and capital, respectively. In a new diagram, in please draw an isoquant that represent an output level of 20 units.
2. Suppose the price of labor, w, is 1 and the price of capital, r, is 2, and the firm’s budget, C, is 100. Please draw the firm’s isocost line in the same diagram.
3. Can the firm produce 20 units of output?
4. Given the firm’s isocost line, what is the maximum amount of output it can produce and what combination of labor and capital will it use at this production level and how much will the firm produce? Solve for this optimal input bundle using calculus and then show it in your diagram.

Need help solving for part D. Thanks

3.) Imagine a Cournot model in the market for soda sold by Coke and Pepsi (two firms with identical goods, that face the same demand curve, same constant marginal and average costs, and each choose quantity simultaneously) that face the following price function and marginal cost: P(Q) = 100 – 2q1 – 2q2 MC = 20

a. What is the best response function for Coke?

b. What is the best response function for Pepsi?

c. How much soda should Coke produce to maximize profit? How much soda should Pepsi produce to maximize profit?

d. What price should the firms charge for soda? How much profit does each firm make?

e. Explain why your above answers are the Nash Equilibrium for this game. How is this different from a Bertrand model?

Sales mix and break-even sales

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $141,000, and the sales mix is 80% bats and 20% gloves. The unit selling price and the unit variable cost for each product are as follows:

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

1. Compute the break-even sales (units) for the overall enterprise product, E.

   units

2. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?

   Baseball bats:	units
   Baseball gloves:	units

Suppose the inverse demand curve for the monopoly firm Acme Inc. is P = 10 – 0.1Q, and that Acme’s total cost is C(Q) = 100 + 2Q.

a. (8) Find the monopoly’s price, output, and profit.

b. (6) Carefully graph the curves necessary to illustrate the firm’s price and output decision, labeling both curves and axes. Show the deadweight loss.

c. (8) Suppose Acme realizes that its market demand represents the demand of 10 identical consumers, each with an individual inverse demand curve of p = 10 – q. Find the two-part tariff that will maximize Acme’s profits, and calculate those profits, assuming that Acme still has the same total costs. Do these profits differ from those you found in part a? Why or why not?