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Describe the Pareto optimum or the set of Pareto optima. Is it unique? Is perfect risk sharing achieved? Why or why not? Answer the same question if the state 2 endowments were 5 for agent 1 and 3 for agent 2. b. Agents can trade with two Arrow-Debreu securities denoted by Q [with payoffs (1,0)] and R [with payoffs (0,1)]. Calculate the competitive equilibrium allocation. Is it Pareto optimal? Discuss intuitively its characteristics (the determinants of the prices of the two securities and the post-trade allocation). c. Suppose that both securities can be traded at the beginning and there are no short-selling constraints. A firm has zero cost of introducing one unit of either security, and it wants to maximize its profits. Which security should it introduce? For which agent is this introduction more valuable? Is the outcome Pareto optimal? Why or why not? 9.4. Two-part question: a. To what extent should we care whether the current organization of markets leads to a Pareto optimal allocation? b. Are markets complete? Do we care

(24 points) Joe considers beer and soda to be perfect substitutes at a rate of 1:2, that is, he always receives the same utility if he has one beer or two sodas to drink. He spends $12 a day on drinks, and beers cost $3 while sodas cost $1 each. However, one day the price of beers decreases to $2; there is no change in his budget. (a) (6 points) How does consumption change when the price of beers changes? What is Joe's new level of utility? (b) (6 points) Show with the aid of a graph what happens to the optimal allocation and the level of utility when the price of beer changes. (c) (6 points) How much must Joe's budget decrease to return him to the original utility level? (d) (6 points) Now assume the price of beers returns to the original price of $3. Describe the demand curve for soda holding the price of beer and income constant; a graphic representation is optional. Problem 3 by MIT OpenCourseWare. 4. (42 points) Xiaoyu spends all her income on statistical software (S) and clothes (C). Her preferences can be represented by the utility function: U(S,C) = 4ln(S) + 6ln(C). (a) (6 points) Compute the marginal rate of substitution of software for clothes. Is the MRS increasing or decreasing in S? How do we interpret this? (b) (6 points) Find Xiaoyu's demand functions for software and clothes, QS(pS,pC,I) and QC(pS,pC,I), in terms of the price of software (pS), the price of clothes (pC), and Xiaoyu's income (I). 1 (c) (6 points) Draw the Engel curve for software. (d) (6 points) Suppose that the price of software is pS = 2, the price of clothes is pC = 3, and Xiaoyu's income is I = 10. What bundle of software and clothes (S,C) maximizes Xiaoyu's utility? (e) (6 points) Suppose the price of software increases to pS = 4. What bundle of software and clothes does Xiaoyu demand now? (f) (6 points) Given the price increase, how much income does Xiaoyu need to remain as happy (have the same utility) as she was before the price change? What bundle of software and clothes would Xiaoyu consume if she had that additional income, given the new prices? (g) (6 points) Going back to the situation in part (e) (pS = 4 and I = 10), decompose the total change of software and clothes demanded into substitution and income effects. In a clearly-labeled diagram with software on the horizo

A community bank partnered with an analytics solution provider to develop new fraud detection algorithm for ATM withdrawals. The bank provided historical data and the company trained a model that seemed to provide an acceptable performance when tested on the data. Once implemented, however, the bank faced a major tragedy: the algorithm was too slow in the production environment, and, as such, most ATM withdrawal requests were timed-out and customers were not able to withdraw from their accounts. Discuss which aspects of the project were ignored and which phase(s) of the analytics project, the problem can be associated to?

Why might the cash/deposit ratio and the reserve asset ratio be decreasing functions of the rate of interest? How does an interest sensitive money supply affect the LM curve? Illustrate using an example, comparing the new LM with the standard LM.

In Japan, the price of real estate dropped dramatically in the late 1980s. Many Japanese firms have long-term relationships with a so-called main bank. How would you expect a deterioration of the balance sheets of Japanese firms and of their main banks to affect investment? Would you expect smaller or larger firms to be most affected?

A firm produces output using the technology y = 1 1,000 KL1 2 , where capital, K, is measured in machine-hours, labor, L, is measured in person-hours, and y denotes the yearly output. The hourly wage rate wl = 10, and the hourly rental rate of capital is wk = 20. (a) Show that this technology displays increasing returns to scale. (b) Compute the marginal products of labor and capital. (c) Suppose that at the end of 1999 the firm has signed a contract to rent K = 1,000 machine hours over the course of the year 2000. Derive the firm's short run cost function in the year 2000. (d) What is the firm's short run marginal cost function? What is the firm's short run average cost function? At which point do these two curves intersect? (e) On a diagram plot the firm's short run average and marginal cost curves.

The aggregate labor supply in the state of Bahnanas is Ls = 2,000w, where w is the hourly wage, measured in Bahnanas $ and Ls denotes the number of person- hours supplied by the workers of Bahananas in a year. The aggregate labor demand in the state of Bahananas is Ld = 12,000 2,000w, where Ld denotes the number of person-hours demanded by the firms of Bahnanas in a given year. (a) Compute the equilibrium hourly wage and the amount of hours worked in a given year. (b) The government of Bahnanas introduces a minimum wage law requiring firms to pay an hourly wage not lower than $4. Compute the equilibrium number of hours worked by the workers of Bahnanas. 1 (c) On a diagram that has the wage rate on the y-axis and the number of hours on the x-axis, plot the labor demand and supply functions and the equilibrium prices and quantities that you found in points (a) and (b). (d) Compute the deadweight loss induced by this policy, and show it on the diagram of point (c).

a) Compute the price and income elasticities of the following demand function xd (p,m) = 1 2 m p . (b) A firm produces output, denoted by y, using the following production function y = 10 L, where L represents the labor input, measured in person-hours. The unit price of output is $10. Let w denote the hourly wage rate. Compute and plot on a diagram the inverse labor de

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

. How does appropriate information management affect a business's relationship with its customers? A. Businesses earn higher profits. B. Businesses serve customers more effectively. C. Businesses lose focus on customers. D. Businesses make better financial decisions. 73. When a business uses computer technology to manage its money and move it among different accounts, it is taking advantage of A. electronic transfer of funds. B. hardware. C. expert systems. D. electronic data interchange. 74. You cannot communicate with your computer without A. Microsoft Windows. B. a wireless mouse. C. an operating system. D. a mobile device. 75. Which of the following is usually the quickest way that businesses can obtain information about unknown potential new vendors that are located in other parts of the country: A. Phone an agent B. Send an email to the vendors C. Fax a request to the vendors D. Search the Web 76. Businesses often use word-processing computer software to produce A. detailed reports, memos, and contracts. B. complex graphics, letters, and reports. C. research reports, spreadsheets, and tables. D. business plans, contracts, and spreadsheets.

77. If a business wants to send a mailing to customers in specific geographic regions, it should set the database query to sort its customer information by A. name. B. sales volume. C. state. D. street number. 78. Computer programs that allow businesses to manage all types of activities, such as inventory control and finance, are known as A. integrated software application packages. B. electronic communications programs. C. interactive information display packages. D. wireless connectivity programs. 79. What is an important consideration when selecting graphics and posting them on a business's website? A. Font size B. Download time C. Descriptive links D. Log files 80. Operations activities are most closely related to a business's A. taxes. B. name. C. product. D. location. 81. Who is responsible for making sure that a business is a healthy, hazard-free place to work that complies with government regulations? A. The employer B. Employees C. The government D. Local law enforcement 82. To prevent injuries when operating

Question: VALS (Values and Lifestyles) is a marketing and consulting tool developed by consumer futurist Arnold Mitchell. Its intent is to "maximize the ability to predict consumer behavior" based on an analysis of lifestyle and personality traits. Market researchers have found that this aids in analyzing and predicting consumer preferences and choices in purchasing behavior.

Next, read the section describing The VALS Types. Note that this instrument places consumers into one of eight segments based on their responses to a questionnaire. There is primary motivation (horizontal dimension) and resources (vertical dimension).

Resources are broadly defined to include income, health, education, and self-confidence. Primary motivation includes three (3) different self-orientation patterns, including principle-oriented (directed by your beliefs), status-oriented (desire for approval by others), and action-oriented (desire for activity, variety, or risk-taking). Click on and review each of the 8 VALS types.

Now, click on the VALS Survey link and take the survey, answer each of the questions, and click submit. Note that you will be redirected to a Web page displaying your results within about 5 - 10 seconds. Your results will not be emailed to you. Instead, copy and paste the description provided for you. (Remember that you will need to capture the data or print it out before you leave their website because they will not send you follow-up emails with your results and you will need them to answer the assignment questions.)

If you need additional information or help, click on the link entitled Survey Help/ Vals FAQ in the VALS website or go directly to the Survey Help / VALS FAQ.

After you have identified your results, answer the following questions based on your results:

Identify your primary and secondary VALS category (or segment) based on quiz results and describe them. Do you think these categories are truly reflective of your psychographic profile? How do you feel about the results of the survey? Do you agree or disagree with your results? Why or Why not? How would a marketer utilize such psychographic information to influence consumer purchases? Cite an example Links-

VALS Types- http://www.strategicbusinessinsights.com/vals/ustypes.shtml

VALS Survey link- http://www.strategicbusinessinsights.com/vals/presurvey.shtml

Survey Help / VALS FAQ.- http://www.strategicbusinessinsights.com/vals/help.shtml

Describe intuitively a Pareto optimal allocation of resources. Is it unique? b. Suppose only one type of security may be issued. Is it possible to achieve the Pareto optimal allocation? If so, how? c. Suppose the commodity in the previously described economy can be costlessly stored. No other asset is traded. Describe intuitively how this opportunity will be exploited and why. Is the utility level of the two agents increased?

Describe the Pareto optimum or the set of Pareto optima. Is it unique? Is perfect risk sharing achieved? Why or why not? Answer the same question if the state 2 endowments were 5 for agent 1 and 3 for agent 2. b. Agents can trade with two Arrow-Debreu securities denoted by Q [with payoffs (1,0)] and R [with payoffs (0,1)]. Calculate the competitive equilibrium allocation. Is it Pareto optimal? Discuss intuitively its characteristics (the determinants of the prices of the two securities and the post-trade allocation). c. Suppose that both securities can be traded at the beginning and there are no short-selling constraints. A firm has zero cost of introducing one unit of either security, and it wants to maximize its profits. Which security should it introduce? For which agent is this introduction more valuable? Is the outcome Pareto optimal? Why or why not? 9.4. Two-part question: a. To what extent should we care whether the current organization of markets leads to a Pareto optimal allocation? b. Are markets complete? Do we care