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Andy and Bobbi each have a job that pays $100,000 per year. Andy has a 5% chance of contracting an illness that would allow him to only make $60,000 next year while Bobbi has a 10% chance. (i) calculate each person's expected income for next year. (ii) if each could insure against an income reduction in the event of illness, calculate the actuarially fair insurance premium for each.
Read the excerpt from “First Generation” of Dreaming in Cuban, by Cristina Garcia. She considers the vagaries of sports, the happenstance of El Líder, a star pitcher in his youth, narrowly missing a baseball career in America. His wicked curveball at..
The local swimming pool charges nonmembers $10 per visit. If you join the pool, you can swim for $5 per visit, but you have to pay an annual fee of $F. Use an indifference curve diagram to find the value of F that would make it just worthwhile for yo..
What effect each of the following events would have on LRAS? Would LRAS shift left, right or no effect? Explain why.
If you were to draw the two nations' PPF's on the same graph, elucidate which would be farther to the right.
Between 2011 and 2012, the quantity of cars produced and sold decreased by 20%. During the same period, the price of cars increased by 5% and the cost of gasoline increased by 20%. We know that the cross elasticity of demand of gasoline is -0.3. Comp..
Define economies of scale. Are economies of scale evident in the airline industry? What is the implication for market entry? Airline passengers are broadly segmented by purpose of travel. Characterize the two major segments by price elasticity of dem..
A consumer has utility function given by u(x_1, x_2) = Squarerootx_1x_2. Suppose the price of good 1 falls from $5 to $2. while the price of good 2 and the consumer's income remain constant at $10 and $100, respectively. Find the substitution, income..
Introductory economics textbooks usually first introduce the minimum wage as an application of demand and supply analysis. This initial discussion is usually based on the following assumptions: the labor market is perfectly competitive, the minimum w..
How do developing and industrial countries differ in their use of technological change, labor, capital, and natural resources to produce economic growth? Why do these differences exist?
q1. explain how does an increase in transport costs change the gains from trade in melitzs 2003 model? are the effects
q1. illustrate which country has the most fundamentally sound monetary policy?q2. insurance agents receive a commission
Pepsi-Cola® and Coca-Cola® have dominated the market for almost a century whereas General Motors™ and Ford Motor Company© have suffered due to increased competition.
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