1- A firm is investing $1000. It might get a profit of $100 with a probability 0.6 or a profit of $40 with a probability at um What is the expected return of the firm?" (") 2- Consider the following game: ( ( ) Hunter B Hunt deer Hunt bird Hunter A Hunt deer 4.4 0,37 Hunt bird 1.0 - 3,3 1 What is each player's dominant strategy? Find the Nash Equilibrium? Show your working including graphs, if any 3. Consider the following game: (6) Kicker Kick left Kick right Goalie Save Left 1,0 0.1 Save right 0.1 1,0 The probability that the goalie will save left is ic. Find the mixed-strategy Nash equilibrium. 4. The inverse market demand curve for bean sprouts is given by P[Y ) = 100-2 , and the total cost function for any fi in the industry is given by TCly) = 4y If the bean-sprout industry is perfectly competitive. how much bean sprouts will it produce and at what prices 5- Suppose a production function /(x,.x2) = (x; + x;)". where a and b are positive constants. For what values of a and h does this function show constant returns to scale? Increasing returns to scale? ( b ) 6- Consider a firm with production function f (x,."]) = xx . The price of Its output is 4, while the price of factor 1 and price of factor 2 is wa- ( 6 ) Find the firm's profit maximizing level of output. How much of each factor will the firm hire? 7- Consider a newspaper whose demand depends on the price and the amount of scandal reported The demand f is Q = 15 Sip-1, where Q is the number of issues sold per day, S is the number of column inches of scandal rep the paper, and P is the price The cost of reporting S units of scandal is $105. These costs are independent of the of papers sold. In addition it costs money to print and deliver the paper. These cost $0.10 per copy and the co: is independent of the amount of scandal reported in the paper. Therefore the total cost of printing O copies of with 5 column inches of scandal is $105 + 0.100. If this newspaper charges profit maximizing price and prints 100 column inches of scandal, how many copies