Expert answer:I need help answering those economics questions

Answer & Explanation:tutorhelp.docx
tutorhelp.docx

Unformatted Attachment Preview

1. A tutoring service estimates the daily demand curve for its current customers as
Q = 320 – 2P.
It has a constant marginal cost of $80 per pupil.
a. Find the profit-maximizing price and daily quantity.
b. There is another group of potential customers who the service estimates has demand elasticity
twice that of its current pupils. They want to offer this new group a coupon; what amount coupon
should they offer?
2. A new concierge physician wants to charge an entry fee to give patients access, then a use fee
per visit. She estimates demand to be
Q = 61.25 – 0.25P
and her marginal cost as
MC = 20 +0.5Q.
a. How many patients should she limit her practice to?
b. What entry fee should she set?
c. What should the use fee per visit be?
3. The table below shows the projected profits for GM (in bold) and Ford. Each firm can only
afford to introduce one new model this year, and must decide if it should be a Small Car (SC), a
Sedan (S), or a Truck (T). The profits for each firm depend partly on what the other firm does,
and are listed in the table below (in millions of dollars).
GM
SC
S
T
SC
-40, -40
50, 60
200, 100
Ford
S
20, 80
-100, -100
100, 20
T
120, 150
30, 70
-60, -60
a. Using game theory for a one-shot, simultaneous decision game, find all the Nash equilibria.
b. Identify all dominant strategies.
c. Identify all dominated strategies.
d. If GM believes that Ford will beat it market with a new truck, what should GM do?
4. A firm is trying to decide how to roll out a new product: as a small test (Test), with a
moderate roll-out (Moderate), or with a huge roll-out (Huge). The consumer reception to the
product could be Weak, Tepid, or Strong. The expected profits (in $millions) under each
scenario are in the table below:
Weak
Consumer Reception
Strong
Very Strong
Roll-Out
Type
Test
Moderate
Huge
10
5
-15
5
4
-10
-50
20
30
a. What type of roll-out should the firm use if it considers the probabilities to be: Weak=0.1;
Strong =0.8; Very Strong=0.1.
b. A consultant knows exactly how consumers will receive this product, and she will tell you
after being paid. What is the most this perfect information is worth?
5. Given the following values and relations in a closed economy (no foreign trade):
Y=F(K,L)=1,800
Y=C+I+G
C=500 + 0.5(Y-T)
I=250 – 20(r)
G=400
T=400
Production function; long-run output is 1,800
National Income Accounting Identity
Consumption function
Investment function (r is real rate of interest)
Government purchases of goods and services
Lump-sum taxes
For parts a & b, find equilibrium values with the economy in the long-run. Assume fully flexible
prices.
a. Find: C, I, r, Private Saving, Public Saving, Total Saving.
b. Now let G increase to 450, while T stays at 400. Find C, I, r, Private Saving, Public Saving,
Total Saving.
c. If there is an increase in Investment at all levels of r (the Investment demand function shifts to
the right), what other variables will change and why?
d. Now assume the economy is in the short run, where some prices might not be fully flexible.
Very briefly describe how this might change the result in part b., particularly in regards to overall
output (Y) and average prices.
…
Purchase answer to see full
attachment

How it works

1. Paste your instructions in the instructions box. You can also attach an instructions file
2. Select the writer category, deadline, education level and review the instructions 
3. Make a payment for the order to be assignment to a writer
4.  Download the paper after the writer uploads it 

Will the writer plagiarize my essay?

You will get a plagiarism-free paper and you can get an originality report upon request.

Is this service safe?

All the personal information is confidential and we have 100% safe payment methods. We also guarantee good grades