Analyze the following questions and give correct answers.
A monopoly sells its product to n=10 individual consumers each of whom has individual invers demand curve given by p(y)=20-y, where y is the quantity demanded by a single consumer at price p. The firm has a cost function given by c(Y)=4Y, where Y is the total output level produced by firm.
a) suppose the firm can not price discriminate. Derive the aggregate inverse market demand curve p(Y), where Y is the quantity demanded by all consumers at price p. Calculate the profit-maximizing output level Y* and market price p(Y*). Calculate firm's profit, CS and DWL. Demonstrate on a graph.
b) Suppose the firm can use the first degree price discrimination. Calculate the total output level produced by the firm, firm's profit, CS and DWL....
7. Diamond "style" OG model with concerned parenting Time: discrete, infinite horizon, t = 1, 2, ... Demography: A mass N, = N for all t of newborns enter in period t (i.e. no population growth). Each person is born into a household or dynasty. Everyone lives for 2 periods except for the first generation of old people who live for one. Preferences: for the generations born in and after period 1, U(at, (241, $1+1) = m(Ci) + Buz(C24+1) + Bu.(8#+1) where cir is consumption in period f and stage i of life and s,+ is the amount of old age consumption good given up in the process of providing human capital h for the young person in their household. For the initial old generation (21 ) = us(Q,) tu,(s, ). The utility functions, u.(.) i = 1, 2, s are all twice differentiable and concave. The function us(.) represents the extent to which a parent cares about the quality of their child's future skill set. Productive technology: The production function available to firms is F( H, N) where # is the human capital stock and N is the number of workers employed. F(.,.) is a constant-returns-to-scale standard neoclassical production function which satisfies the Inada conditions. (You may find it convenient to use the implied per young person production function, f(h) where h is the human capital stock per worker.) Foregone consumption (or saving) by the old is converted one-to-one into the human capital of their child. Children cannot create human capital on their own account. So, the only way they can accumulate human capital is if their parents spend the required resources on their behalf. Endowments: Everyone has one unit of labor services when young. (The old survive by renting their human capital.) The initial old share an endowment, Hi of capital so they have hy units each. Institutions: There are competitive markets every period for labor and human capital. (You can think of a single representative firm which takes wages and interest rates as given.) (a) Write down and solve the problem faced by the individuals born in period t. (b) Write down and solve the representative firm's problem in period t. (c) Write down the market clearing condition for human capital and define a com- petitive equilibrium. (d) Solve for an equation that characterizes the dynamics of the human capital stock. Now suppose u (c) = uz(c) = In(c), u.(s) = Bs where B is a constant and f(h) = And where A is a constant. (e) Obtain any steady state value(s) of human capital per worker, I', and characterize the dynamical properties. 15 (f) Draw the phase diagram (g) Now, without doing the work, state how the model analysis would differ if each dynasty started out with a different initial human capital endowment say distribe uted uniformly on [0, (a.A) ]? & Consider the following variant of the Lucas tree model. The preferences of the repre- sentative consumer are E. ( B'0, I(c)) , 0 72. Explain how this change affects the effectiveness of monetary policy. (b) (7 marks) Suppose that the economy is sitting at its frictionless long-run equilibrium. Suddenly, the government implements a completely unanticipated cut in government spending (Gt). Describe the new short-run equilibrium of the economy. In particular, explain the effect on the output gap. employment level. price level. interest rate. and real wage rate. (c) (7 marks) What is the best response of monetary policy to the contractionary fiscal policy described above? Compare this monetary policy response to the response when prices are more flexible (71 > '72). (d) (6 marks) Suppose that in addition to the decline in GE, the government announces a decrease in future government spending OH]. What is the effect of this announcement in today's short-run equilibrium? What is the optimal monetary policy in this case? Albert, a dentist surgeon, and Joan, businesswoman, were married 10 years ago and have three children Alex (3 years old), Sam (5 years old) and Joe (8 years old). Before their marriage, they signed a Marriage contract in which it is clearly stipulated that: Both spouses shall be separate as to property; Each shall have the sole administration of his or her assets; Each may dispose of them without the consent or authorization of the other spouse; The spouses have the following assets: An Immoveable property registered in Albert's name that is considered as their Family residence. This property is presently valued at 975,000.00$ and has a mortgage of 95,0005; A Condo situated in Miami (USA) under Albert's name valued at 225,000.00$ with no mortgage; where the family spends most of the school vacation; The furniture in the Family residence is evaluated at 125,000.005 and is all paid; The furniture in the other secondary house is evaluated at 25,000.005, with no outstanding debts; For their family use: o The Husband drives a Mercedes Van evaluated at 62,000.00$ with an outstanding debt of 25,000,00$; o The wife drives a Honda Van evaluated at 45,000.005 with an outstanding loan of 12,000.005; O Albert and Joan use the 24, when they have an outing without the children; 409 0es Albert has an RRSP valued at 125,000,005; Joan's RRSP is valued at 145,000.00$ Albert's different investments and bank accounts are valued at 225,000.005 Joan's different investments and bank accounts are valued at 125,000.005 Albert is the equal co-owner with two other dentists. Their clinic is evaluated at 600,000.00$ and is located in a commercial building that the 3 own on equal shares, evaluated at 3,000,000.005 ; Albert dies in a car accident and Joan announces his death in the daily newspaper. Joan has the surprise of her life when Dan presents himself to her and tells her that he is Albert's son. His mom and Albert had an affair during the University graduation and she fell pregnant but never tried to find Albert and inform him of his son's birth. So, when she saw the announcement in the newspaper, she told her son the whole truth because she wanted him to pay his last respects to his deceased sen, father After the funeral, Joan finds in her husband's papers a handwritten document in which Albert awards, upon his death, the quarter of all his assets to his wife and three quarters of all his assets to his children.loan proceeds with the settlement of her husband's estate according to his last wishes. QUESTION 1 (10 points] What is the name of the will that Albert left? Question 3 (15 points) Name each of Albert's heirs and what amounts will each heir receive from Albert's Estate? NAME OF THE HEIR AMOUNT TO BE RECEIVED Question 2 (75 points) Write down all the process of the settlement of the estate by stating the exact items that are taken in consideration as well as the detailed calculation of the family patrimony Answer to Question 2 (75 points) Process of the settlement of Albert's estate & Listing the exact items that are taken in consideration
