Question 1: Consider the following strategic situation. Two friends are making sushi together. The first friend has offered to go grocery shopping, while the other friend has offered to make the sushi.

?The first friend goes to the supermarket and buys a main ingredient: Tuna, unagi(BBQ eel), or salmon.

?They then buy either avocado or cucumber as a second ingredient. Meanwhile, the second friend has to decide how much sushi rice to make.

?They can either make a large batch or a small batch

?They don't see what their friend has purchased when deciding Finally, they make sushi.

The type of sushi depends on the choices of first friend:

?If they bought cucumber, they make small sushi rolls.

?If they ordered salmon or tuna, and avocado, they make large rolls.

?If they ordered unagi and avocado, they make small rolls.

However, if they make large rolls and have a small batch of rice, they run out. If they make small rolls and have a large batch of rice, they waste some.Both friends value sushi rolls based on their ingredients, and the rice situation:

?Avocado is the best, and is worth 5 utility

?Unagi is the second best, and is worth 4 utility

?Salmon is worth 3 utility

?Tuna is worth 2 utility

?Cucumber is worth 1 utility

?A large roll increases the value by 2 utility

?Running out of rice reduces the value of a roll by 50%

?Wasting rice costs 1 utility.

Payoffs are the sum of all the components. For example, an avocado and salmon bowl with a large amount of rice prepared is worth 5 + 3 + 2 = 10 utility. If they made only a small amount of rice, it would only be worth 5 utility.

(a) (10 points) Draw the tree representation of the game above, being careful to include information sets and actions.(Hint: you might want to re-phrase the first friend's decisions in terms of roll choice,rather than ingredients.)

(b) (10 points) Find any one equilibrium in this game. Explain!(Hint: What possible beliefs can the second friend have?)

(c) (15 points) Draw the matrix representation of your game, and solve it for all of the NE. Which ones agree with your equilibrium? Explain

Question 08. Given the following utility function and budget constraint, determine the optimal consumption bundle and draw it on the graph below. (Hint: Assume interior solution-not a corner solution). u(X1, X2) = X1"x2""", where a = I = PIXI + pzxz, where I = $1000, p1 = $5 and pz = $10 X2 X13. Assume that the US resident uses his 112,000 JPY to purchase a camera from a store in Japan and then brings it back to the US. The transaction can be recorded by noting the foowing (for the US): (a) +$1.000 Financial account, $1.000 Capital account. (b) +$1.000 Financial account, $1.000 Current account. (c) +$1.000 Current account, $1.000 Financial account. ) l (d +$1.000 Financial account, $1.000 Financial account. [e +$1.000 Capital account, ~$1.000 Financial account. Question 39 Not yet answered Marked out of 1.00 P Flag question "To provide better guidelines on standard cost accounting practices", is one of the objectives of a manufacturing firm that can be achieved through O a. Cost Accounting Standards O b. Generally Accepted Accounting Principles O . Charted Accounting Institute Standards O d. International Financial Reporting Standards3/4 9. All other things equal, consumer surplus is higher when the demand curve is more ; producer surplus is greater when the supply curve is more A) inelastic, elastic B) inelastic, inelastic C) elastic, elastic D) elastic, inelastic 10. The First Fundamental Theorem of Welfare Economics states that: A) the competitive equilibrium, where supply equals demand, can always be achieved through government intervention.1. A fundamental principle in economics is that people face trade-offs. Draw a clearly labeled production possibilities frontier to illustrate society's trade-off between a clean environment and the quantity of industrial production. Show what happens to the frontier if the same amount of electricity for industrial production is derived from solar and wind energy rather than coal energy