Assume that there are two teams (for simplicity, call them team 1 and team 2) that produce cricket games. Each team is a monopoly in their product market with demand curve:

P(q) = 420 ? 3q

The production function for each team is given by: q(k) = k where k is the quantity of labor hired by the team.

The aggregate supply of labor is: w(K) = 2K where K = k1 + k2 is the total amount of labor hired by the two teams.

Part 1. Assume that the two teams compete against one another by simultaneously choosing a quantity of labor to hire.

a) Find each team's best response function.

b) Find the equilibrium wage and amount of labor hired by each team.

c) Find each team's profits.

Part 2. Now, assume that the two teams can collude as a league.

Note that the aggregate product demand curve faced by the league is given by P(Q) = 420 ? 3 2Q.

a) Find the equilibrium wage and the amount of labor in the market (K).

b) If the teams agree to split the profits, how much labor is hired by each team (k)? Find each team's profits.

c) What is the highest level of profits that a team can get if they deviate from this agreement? Is collusion a Nash equilibrium of the one-period game?

Part 3. Now, assume a bilateral monopoly, union and league consolidate market power. The union has bargaining power ? = 0.3.

a) Find the equilibrium quantity of labor.

b) What is the wage that gives players all the surplus? What is the wage that gives teams all the surplus?

c) Find the negotiated equilibrium wage.

d) If the teams agree to split the profits, how much labor is hired by each team (k)? Find each team's profits.

Part 4. Instead of accepting the negotiated wage as in part 3, suppose that teams attempt to act as a collusive monopsony as in part 2. For any period in which teams collude, the union can go on strike. In this case, teams must hire replacement players and get 100 less in profits in any period that they collude (so, they only get ? 0 c = ?c?100). Assume that the discount rate is ? = 0.6.

a) If the players do not strike, can the teams support a collusive monopsony?

b) If the players strike, can the teams support a collusive monopsony?

c) Will the teams collude or accept the negotiated wage? Explain your reasoning as fully as possible.

SALES BUDGET: March April May June Total Sales 65000 $85,000 $115,000 $80,000 SCHEDULE OF EXPECTED CASH COLLECTIONS: April May June March sales $39,000 April sales $34,000 $51,000 May sales $46,000 $69,000 June sales $32,000 July Sales Total Cash Collections $73,000 $97,000 $101,000 MERCHANDISE PURCHASES BUDGET: April May June Budgeted COGS 46,750 63,250 44,000 Add desired ending inventory 25.300 17.600 16.500 Total needs 72,050 80,850 60,500 Less beginning inventory (18.700) (25.300) (17 600) Required purchases 53. 350 55 550 42.900 BUDGETED CASH DISBURSEMENTS FOR MERCHANDISE PURCHASES April May June Accounts payable $20,075 April purchases $26,675 $26,675 May purchases $27,775 $27,775 June purchases $21,450 July purchases Total cash payments $46, 750 $54,450 $49,225 CASH BUDGET April May June Cash balance $8,000 $5,100 $15,300 Add collections from customers $73.000 $97.000 $101 000 Total cash available $81.000 $102 100 $16.300 Less Disbursements Merchandise purchases $46,750 $54,450 $49,225 Advertising $7,000 $7,000 $7,000 Salaries $12,000 $12,000 $12,000 Shipping 3% Sales $2,550 $3,450 $2,400 Other Exp 6% Sales $5, 100 $6,900 $4,800 Equipment purchases $14.500 $3.000 Total Disbursements $87.900 586 800 575 425 Excess (deficiency) of receipts over disbursements $6.900 $15.300 $40 875 Financing: Borrowings $12,000 $0 $0 Repayments -$12,000 Interest -$360 Total financing $12.000 -512.360 Cash balance, ending $5, 100 $15,300 $28,515QUESTION 1 When Smart argues that rule-utilitarianism is a form of "rule worship," he is suggesting that it is less like a consequentialist argument and more like social contract theory. True False QUESTION 2 According to utilitarians, we ought to evaluate actions In terms of the total happiness that they produce. True False QUESTION 3 Smart defends rule-utilitarianism as more plausible than act.utilitarianism. True FalseQuestion 1What mechanisms could be put in place to motivate management to consider the interests of: (a) the owners? (bl the dsmhaldsm? Question 2 How could accounting regulators use the research conducted by Positive Accounting theorists? Question Home researchers who utilise Legitimacy Theory posit that organisations will attempt to operate within the terms of their 'social contract'. What is a social contract? Question 4ln 2006 the Australian Government established an inquiry into corporate social responsibilities with the aim of decidirg whether the Corporations Act should be amended so as to specically include particular social and environmental responsibilities within the Act. At the completion of the inquiry it was decided that no specic regulations mold be added to the legislation, and that instead, 'market forces' would be relied upon to encourage companies to do the 'right thing' (that is, the View was expressed that if companies did not look after the environment, or did not act in a socially responsible manner, then people would not want to consume the organisations' products, and people would not want to invest in the organisation, work for them, and soforth. Because companies were aware of such market forces they would do the 'right thing' even in the absence of legislation]. You are required to explain the decision of the government that no specic regulation be introduced from the perspective of: 1. Public Interest Theory 2. Capture Theory 3. Economic Interest Group Theory of regulation. D Question 32 2.5 pts A life insurance contract contains clauses for O settlement options. O policy reinstatement. O change of policy. O all of the above. O none of the above.12. Which ethical framework is framed around the Categorical Imperative? ) Culbaral Relativism bj Social Contract Theory c) Kantianism d) Act Utilitarianism c) Cmegorical UtilitareLatianium 13. Which ethical framework suffers from the problem of moral luck? a) Virtue Theory bj Subjective Relativism c) Kantianlar dj Social Contract Theory c) Act Utilitarianism 14. Which ethical framework could be described as utilitarianism focused on just oneonly?" ") Divine Command Theory bj Ethical Egoism ") Kantianism dj Rule LuMarianism el Act Utilitarianism 15. Which ethical framework recognizes that our moral decision-making skills develop over time? al Divine Command Theory by Virtue Theory cl Social Contract Theory d Rule Unlitarianism cl Cultural Relativism 16. "What's right for you may not be right for me" is from... ") Kantianism bj Rule Utilitarianism c) Virtue Theory d) Social Contract Theory c) A Pixar movie 17. Plato was Socrates" student The above statement is false by The above statement is true