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1. why does the assumption of independence of risks matter in the examples of insurance? What would happen to premiums if the probabilities of houses burning were positively correlated? Can you think of a situation where they might be negatively correlated?
2. Small firms can discover the abilities of their workers more quickly than large ones because they can observe the workers more closely at a variety of tasks. does it then make sense for people with high abilities to go to small firms? give some reason why and some reasons why not.
3. in some ways monitoring is easier in a partnership than a corportion, where shareholders monitor directors. In what ways is monitoring easier and what ways its not.
4. A friend convines you that she has a great idea for a business and the two of you incorporate. you supply her with funds and let her make all of the executive decisions. under the agreement you hold 30 percent of the firms stock and your friend holds 70 percent. Why should you ever put yourself into a position where your friends decision will carry the day whether you agree with her or not? what does this tell you abount problems that allegedly stem from seperation of ownership and control?
toms pizza sells for 5.00 ea and serves an average of 425 customers per week. during a recent sale tom lowered the
Assuming that input prices do not vary with the level of output, does this production function display economies of scale? b.The firm is producing in the short run with capital fixed at 9 units. The fixed costs of the firm are $1000 in the short ru..
Why do you think firm 1's marginal cost is lower than firm 2's marginal cost? Determine the current profits of the the two firms. What would happen to each firm's current profits if firm 1 reduced its price to $6 while firm continued to charge $8?
Alfred chan decided to buy an old duplex as an investment. After looking for several months, he found a desirable duplex that could be bought for $300,000 cash. He decided that he would rent bought sides of the duplex, and determined that the tota..
question 1 what do you mean by a social welfare function? if you suppose that such a function exists what properties of
Explain why government regulation is needed in in the Apple ipad industry stating the major reasons why government involvement in a market economy.
question 1californian almond orchands are using approximately one million bee hives each spring to pollinate the almond
Research in developing countries indicate that the incidence of child labor actually rose in some countries as incomes (and wages) of poor families increased. This is difficult to understand since many people assume that as incomes rose, the inci..
Determine your optimal pricing strategy if you and your rival believe that the new Jeep is a "special edition" that will be sold only for one year. Would your answer differ if you and your rival were required to resubmit price quotes year after ye..
A country is described by the Solow Model with a production function y = k1/2 where y is output per worker and k is capital per worker. Now suppose that the fraction of output invested (or saved) is 50%.
1 which of the following statements is true about investment? a planned investment must always equal actual investment
1) PowerSki uses to transmit design changes to suppliers of the 340 components that make up the Jetboard. association software collaboration software design software alliance software 2) Following basically the same process that you'd use to buy a ..
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