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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?
What are the marginal rates of substitution for each person and what is the formula for the contract curve and draw an Edgeworth box, labeling carefully, and indicate the contract curve.
Indicate whether or not each of the following examples of business behavior are legal or illegal under current antitrust law, and mention whether violations under the Sherman Act, Clayton Act, and/or Federal Trade Commissions Act are involved. Pro..
Estimate the monthly payment if the car is purchased with a $15,000 down-payment and estimate the down-payment required to keep the monthly payment at $550
Demand and Supply curves. The following relations explain demand and supply conditions in the wheat industry:
The demand function for product sold by an oligopolist operating in the short run is given below: Compute the profit-maximizing price and quantity, if the firm operates in short run.
As part of the preparations for the arrival of a hurricane, NC residents sought to buy electricity generators. As a result, you expect that in NC
Discuss why will voluntary actions, undertaken at individual level, be unlikely to bring about significant decrease in greenhouse gases such as CO(2)?
Construct the Coutrnot profit function. Differentiate this function and solve for the reaction functions of firm one and firm two.
America's Water Meter Industry is dominated through 4-companies: Rockwell, Badger, Neptune and Hersey. Rockwell has 35 percent market share, and the remaining share rest.
Employ the Internet or other resources to find out an article relevant to activity-based costing (ABC), job costing, or process costing. Make a 125-word executive summary of your article.
Assume the price of beans rises from $1.00 a pound to $2.00 a pound, quantity demanded falls from 10 units to 6 units. In this example, the demand for beans is said to be ______
Examine the extent of internal rivalry, entry, substitutes, buyer power, and supplier power within your industry, indicating whether each of these forces represents a high, medium, or low threat to profits.
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