Correct answers only..

Suppose a monopoly producer is also a monopsonist in the labour market. Demand for the output is p = 100 - Q. The production function is Q = L, and the labour supply curve is w = 10 + L.

a) Suppose the government introduces minimum wage wmin=35. What effect will this have on employment, output, and the firm's profit?

b) What would be the equilibrium wage and employment if the labour market were perfectly competitive? What will be the effect on the firm's output and profit?

Suppose there is a monopolist that is engaging in perfect first-degree price discrimination. a. Graphically depict this situation. Your graph should include profit-maximizing quantity, producer surplus, and consumer surplus. b. Now suppose that a government regulator has the power to dictate the firm's price (and to forbid the firm to price discriminate). If the regulator is interested only in economic efficiency, what price will he/she dictate? How much will the firm produce? Explain briefly. Your answer should make reference to the graph from part (a). c. Does efficiency increase when the regulator's price is put into effect? Explain briefly. Again, use the graph from part (a) to show your answer. d. Who gains and who loses from this change, and by how much? Explain briefly. Again, your answer should make reference to the graph in part (a).

1- In the monetary intertemporal model seen in class, explain and illustrate graphically how decreases in z and z' affect the economy using output supply and demand, labour supply and demand and money supply and demand. (Assume that the direct effect of a decrease in z on the supply of goods is larger that the anticipated decrease in future TFP, z').

2- Explain the effects on real interest rate, wages, aggregate output, prices, employment, consumption, and investment

3- Suppose that the government decides to print money to finance a lump sum transfer of money to the representative consumer. Explain and illustrate graphically what would happen in the goods market, output market and money market as a result of this one-time printing of money.

Sarah Chang is the owner of a small electronics company. In six months a proposal is due for an electronic timing system for the next Olympic Games. For several years, Chang's company has been developing a new microprocessor, a critical component in a timing system and would be considered superior to any product currently on the market. However, progress in research and development has been slow, and Chang is unsure whether her staff can produce the microprocessor in time. If they succeed in developing the microprocessor (probability p1) there is an excellent chance (probability p2) that Chang's company will win the $1,000,000 Olympic contract. If they do not, there is a small chance (probability p3) that she will still be able to win the same contract with an alternative but inferior timing system that has already been developed. If she continues the project, Chang must invest $200,000 in research and development. In addition, making a proposal, which she will decide whether to do after seeing whether the R&D is successful, requires developing a prototype timing system at an additional cost. This additional cost is $50,000 if R&D is successful (so that she can develop the new timing system) and it is $40,000 if R&D is unsuccessful (so that she needs to go with the older timing system). Finally, if Chang wins the contract the finished product will cost an additional $150,000 to produce.

Develop a decision tree that can be used to solve Chang's problem. You can assume in this part of the problem that she is using EMV (of her net profit) as a decision criterion. Build the tree so that she can enter any values for p1, p2, and p3 (in input cells) and automatically see her optimal EMV and optimal strategy from the tree. If p2 = 0.8 and p3 = 0.1, what value of p1 makes Chang indifferent between abandoning the project and going ahead with it? How much would Chang benefit if she knew for certain that the Olympic organization would guarantee her the contract? (This guarantee would be in force only if she were successful in developing the product.) Assume p1 = 0.4, p2 = 0.8, and p3 = 0.1 Suppose now that this is a relatively big project for Chang. Therefore, she decides to use expected utility as her criterion, with an exponential utility function. Using some trial and error, see which risk tolerance changes her initial decision from "go ahead" to "abandon" when p1 = 0.4, p2 = 0.8, and p3 = 0.1.

Sarah Chang is the owner of a small electronics company. In six months a proposal is due for an electronic timing system for the next Olympic Games. For several years, Chang's company has been developing a new microprocessor, a critical component in a timing system and would be considered superior to any product currently on the market. However, progress in research and development has been slow, and Chang is unsure whether her staff can produce the microprocessor in time. If they succeed in developing the microprocessor (probability p1) there is an excellent chance (probability p2) that Chang's company will win the $1,000,000 Olympic contract. If they do not, there is a small chance (probability p3) that she will still be able to win the same contract with an alternative but inferior timing system that has already been developed. If she continues the project, Chang must invest $200,000 in research and development. In addition, making a proposal, which she will decide whether to do after seeing whether the R&D is successful, requires developing a prototype timing system at an additional cost. This additional cost is $50,000 if R&D is successful (so that she can develop the new timing system) and it is $40,000 if R&D is unsuccessful (so that she needs to go with the older timing system). Finally, if Chang wins the contract the finished product will cost an additional $150,000 to produce.

Develop a decision tree that can be used to solve Chang's problem. You can assume in this part of the problem that she is using EMV (of her net profit) as a decision criterion. Build the tree so that she can enter any values for p1, p2, and p3 (in input cells) and automatically see her optimal EMV and optimal strategy from the tree. If p2 = 0.8 and p3 = 0.1, what value of p1 makes Chang indifferent between abandoning the project and going ahead with it? How much would Chang benefit if she knew for certain that the Olympic organization would guarantee her the contract? (This guarantee would be in force only if she were successful in developing the product.) Assume p1 = 0.4, p2 = 0.8, and p3 = 0.1 Suppose now that this is a relatively big project for Chang. Therefore, she decides to use expected utility as her criterion, with an exponential utility function. Using some trial and error, see which risk tolerance changes her initial decision from "go ahead" to "abandon" when p1 = 0.4, p2 = 0.8, and p3 = 0.1.

Question: The purpose of this installment is to classify stock, bond, and mutual fund investments, explore tools for their evaluation and select these securities based on your investment philosophy and goals.

We will assume that you have a total of $12,000 to invest - $3,000 from your M9#1: Assignment: Capstone #9 Annual Budget requirement and $9,000 from your favorite uncle who gave you this gift with the stipulation that it will be used to build your future through investing. You will be constructing a portfolio with $4,000 in stocks, $4,000 in bonds, and $4,000 in mutual funds.

Enter the discussion and post your thread which should contain a separate, numbered response to correspond to each of the following items:

Characterize the types of stock, bond, and mutual fund investments available for your investment portfolio by explaining the advantages and disadvantages of investing in each type.

Explore tools for evaluating stocks, bonds, and mutual funds and make a selection based on your investment philosophy and goals as follows:

a- Stocks: you will invest $4,000 in at least two stocks. For ideas on where to invest, think about two companies that you would like to work for, shop with, or have a general interest in. Visit Yahoo Finance and type their name into the search box to find out more information on each company. An alternative method would be to generate a list of stocks using a stock screener website such as CNBC's Stock Screener (click "GO TO SCREENER" under the first pre-built "Solid Companies/Solid Stocks") and selecting two stocks from the results. After determining your preferred method, review the information provided and indicate the company name, the price per share, and the number of shares purchased for each stock.

b- Bonds: you will invest $4,000 in at least two bonds. Assume that you had three choices: Bond #1 choice: City of Detroit 1%, matures 12/31/27, cost $1,000; Bond #2 choice: Ford Motor Company 1.9%, matures 12/31/27, cost $1,000; Bond #3 choice: XYZ Technology 3.3%, matures 12/31/27, cost $1,000 (this is a new start-up company without any previous bond sales). Describe the type of category that each bond falls into (i.e. municipal or corporate), one benefit and one risk of investing in each, and the tax advantage or disadvantage of investing in each. Finally, decide on which combination of bonds that you will invest in and how many of each that you will purchase. Support your response.

c- Mutual Funds: you will invest $4,000 in at least two mutual funds. For ideas on fund investments, visit Fidelity, Vanguard, or a mutual fund company that you would like to explore. Review the information provided and indicate the mutual fund name, the price per share, and the number of shares purchased for each mutual fund. This is the third of three Spending Diary installments as outlined in Module B located in the Learning Modules section.

Based on your analysis of your diary, provide your answers with a separate, numbered response to correspond to each of the following items:

What did your spending diary reveal about your spending habits during the time period covering this third installment?

If you made changes as a result of the first or second installments, did you see any improvement or obtain the desired result that you were looking for? Also, would you consider making any changes as a result of this installment?

What portion of your spending involves expenses associated with health-related insurance or health-related expenses? Is there any way to reduce these costs?

Give one example of how your daily spending diary can assist you when planning and implementing a budget.

Give one example of how your daily spending diary can assist you in preparing a personal Balance Sheet.

How can your spending diary assist you in reducing income taxes? Give one example.

How can your spending diary assist you in developing an investment philosophy and strategy for long-term financial security? Give one example