## Prior to the 2017 season, the Atlanta Falcons, an American football team in the state of Georgia, discussed the possibility of introducing “street pricing” (a price reduction) for their concessions

Prior to the 2017 season, the Atlanta Falcons, an American football team in the state of Georgia, discussed the possibility of introducing “street pricing” (a price reduction) for their concessions (i.e. food and drinks) at their home stadium in order to improve the fan experience, we will simplify the analysis and think of demand for concessions in bundles with each bundle representing a random combination of food, snacks, and drinks. Suppose the actual quantity demanded for a concession bundle prior to 2017 can be represented by the following demand function: Qc = 3500 – 62.5Pc – 25Pt where QC is the number of concession bundles sold during a season (measured in thousands), PC is the price of one concession bundle (the average amount spent at a game per fan), and P­T is the price of a ticket to a game. a. Given an average ticket price (Pt) of \$80, what is the own-price elasticity (OPE) of demand for concessions when Pc is \$16? Show your work as much as possible, including the formula for own price elasticity. b. Given the elasticity of demand from part (a), what would happen to total concession revenues if the Falcons go forward with the proposed “street pricing” and reduce the price of concessions? How do you know based on your understanding of own price elasticities?

## You decide to create a burger restaurant named BurgerDeals to pay for college fees. The table below contains total pricing information for your single product, large extra-cheese burger. Your town’s

You decide to create a burger restaurant named BurgerDeals to pay for college fees. The table below contains total pricing information for your single product, large extra-cheese burger. Your town’s burger market is fiercely competitive, with big extra-cheese burger selling for \$7 on average. Fill in the blanks in the table and answer the following questions. Output
TC
ATC
AFC
AVC
MC
MR
0
\$10
XXX
XXX
XXX
XXX
XXX

14
2
17
3
19
4
22
5
26
31
7
37
8
44
9
52 A.     is BurgerDeals TFC? B.      is MR from the 4 burger? C.     is AFC if you produce 5 burgers? D.     is AVC if you produce 6 burgers? E.       does each burger cost on average if you make 8 burgers? F.      How many burgers should you make if you want to optimize your profit? G.    If you produce at the profit-maximizing level (or loss-minimizing level), what is the amount of economic profit (or loss) per burger will you make? H.     Illustrate graphically BurgerDeals supply curve.

## Problem III (40 points) Consider a two-period endowment economy with two consumers — i E {1,2} — who wish to maximise their utility, WEI-.01) =1n(6i)+ 5111(4) subject to the budget

Problem III (40 points) Consider a two-period endowment economy with two consumers — i E {1,2} — who wish to maximise their
utility,
WEI-.01) =1n(6i)+ 5111(4) subject to the budget constraints iii—t
c: — yﬁ-t£+(l+r)s.- Ci+Ss Where c,- and c’i are the current and future consumption, and s,- is the amount of savings, for i 6 {1,2} Each
consumer receives exogenous income y; and y: and pays taxes t and t’ in each period. The interest rate is given
by r. There is a government that needs to spend G and G" respectively in the current and future period. The
government can ﬁnance its expenses with tax or debt. that is, the government’s budget constraint are given by G
G’+(1+r)B T+B
T’ where T = 2t and T’ = 2t’ (since there are two people in this simple economy). (15 points) Explain what the variable 3 captures. Carefully deﬁne the competitive equilibrium (c:.c£’, si’)
both for the consumer’s maximisation problem as well as the credit market. Make sure to explicitly
identify all the endogenous variables and the conditions they must satisfy. . (5 points) Suppose that t = t’ = G = G” = 0, y1 = yi = ya = ya, and 61 > ﬁg. Which consumer consumes more in the ﬁrst period? about in the second period? Provide an intuition for your answer (no algebra is necessary). ‘ (5 pOlIltS) Suppose that t = t, = G = G, = 0| ﬁl = (32 < 1! (ylvyi) = (10:5)9 and (“21 ya) = (5! 10)’ WhiCh consumer consumes more in the ﬁrst period? about in the second period? Provide an intuition for
your answer (no algebra is necessary). . (5 points) Suppose that t = t’ = G = G’ = 0,61: 52 =1, 1;; = y’i, and y: = ya. do you expect will be the consumers savings? about government debt? Provide an intuition for your answer (no
algebra is necessary). . (10 points) Consider again the parameters described in part (3.4), but with a new timing for taxes. now denoted by f and t". Suppose t = —1. Compute government debt in this case. Compute t’ that balances
the government’s present value budget constraint. do you expect will be the consumers savings?
Would consumers’ welfare change as a result of this change in taxation timing. Explain the economic intuitions.

## Solve clearly.. Consider an investment with uncertain cash flows. The initial cost of the investment is \$85,000 in year zero. You estimate three scenarios for the following five years: Most

Solve clearly.. Consider an investment with uncertain cash flows. The initial cost of the investment is \$85,000 in year zero. You estimate three scenarios for the following five years:
Most likely came: The project will generate \$30,500 in year 1 and it will increase by \$500 each year until year 5.
.
Optimistic case: The project will generate \$41,000 in year 1 and it will increase by 69% each year until year 5.
Pessimistic case: The project will generate \$25,000 in year 1 and it will decrease by 79% each year until year 5.
a. (10 points) Using properties of Beta distribution, calculate expected value and variance for each year’s cash flows (for n=1,2,3,4,5).
b. (5 points) Assuming that periodical cash flows are independent, determine the expected value and the standard deviation of the present worth for this investment using a yearly interest rate
of 21 95 compounded annually.
[. (5 points) Using normal approximation, determine the probability that this investment will yield a negative present worth (Answer format must be x.xx96).
d. (5 points) Find the net present worth at risk (VaR) with a 95% confidence level for the duration of the project.

## answer QUESTION 17 I am trying to ﬁgure out how to measure an athlete’s productivity. So, I have run a linear regression ofa NBA player’s salary (dependent variable) on a

answer QUESTION 17 I am trying to ﬁgure out how to measure an athlete’s productivity. So, I have run a linear regression ofa NBA player’s salary
(dependent variable) on a player’s statistics including average points, assists, rebounds per game, and turnovers per game (the independent variables). The ﬁnal model is: Salary = 1,000,000 * Points per game + 50,000 * Assists per game + 20,000 * Rebounds per game – 30,000 *
Turnovers per game Last year, Lebronjames averaged 25 points per game, 8 assists per game, 8 rebounds per game and 4 turnovers per game is
Lebron’s predicted salary?

## to calculate the using the following formula: △D = (1/rr) × △R Required Reserve Ratio (rr) =.5 Change in Reserves (△R) = 12 Change in Deposits Calculate the using the

to calculate the using the following formula: △D = (1/rr) × △R Required Reserve Ratio (rr) =.5 Change in Reserves (△R) = 12 Change in Deposits Calculate the using the following formula: M1 = 1 + (C/D)/[rr + (ER/D) + (C/D)]. Currency (C) = 100 Deposits (D) = 1000 Excess Reserves (ER) = 50 Required Reserve Ratio (rr) = .5 3 Calculate the using the following formula: M2 = 1 + (C/D) + (T/D) + (MMF/D) / [rr + (ER/D) + (C/D)] Currency (C) = 1,000 Deposits (D) = 100 Excess Reserves (ER) = 60 Required Reserve Ratio (rr) = 0.3 Time Deposits (T) = 1,000 Money Market Funds (MMF) =1,000 show all steps for my notes.

## In this question, we’ll consider a version of the authority model where the principal works with two agents, each on a separate project. There is one principal who is in

In this question, we’ll consider a version of the authority model where the principal works with two
agents, each on a separate project. There is one principal who is in charge of two projects, i = 1, 2. The principal hires one agent for
each project; we identify the agent associated with project i as Agent i. Each Agent i separately chooses eEort £21′ to produce an idea for his own project 1′. Each Agent i’s
eﬂ’ort cost is is? . At the same time, the Principal P chooses effort levels E1 and E2 to devote to each project. Her total effort cost is :ﬂE1 + E2)2. The probability that Agent 1′ produces an idea for Project i equals his effort 8;. The probability that
P produces an idea for Project 1′ equals E,. For Project 1: if the Principal’s idea is implemented, then the Principal and Agent 1 both receive 1.
Ingent 1’s idea is implemented, then the principal receives 0 < a] < 1 and Agent 1 receives 1. For Project 2: as long as either the Principal’s or Agent 2’s idea is implemented, then both players
receive project values of 1 each. Notice that this means neither agent cares whose idea (his own versus the principal’s) is imple-
mented for their project. The principal does not care whose idea is implemented for project 2, but
prefers to implement his idea over Agent 1’s idea for project 1. P’s total payoff is the sum of his project values from both projects, minus her eﬂ’ort cost %(El + Elf.
Agent is payoff is his project value from his own project, minus his effort cost ail/2. The timing of the game is: 1. Each A, chooses effort level 2,. At the same time, P chooses E1 and E2.
2. Each player’s attempt (to generate an idea) either succeeds or fails.
3. For each project, P chooses which idea (if both are successful) to implement 4. Payoﬂs are realized. c) Work out the equilibrium levels of the agents’ effort choices £1 and £2, and the Principal’s effort choices, E1 and E2. (You’ll have to solve a system of four simultaneous equations, each of which
correspond to one of the ﬁrst-order conditions. nt: once you have the four equations, it ma},r be
convenient to ﬁnd a way to solve for E1 ﬁrst.)

## 1- A firm’s costs are related in the following way. Select one: a. ATC cuts average variable cost (AVC) at the minimum point of AVC. b. MC cuts total cost

1- A firm’s costs are related in the following way. Select one: a. ATC cuts average variable cost (AVC) at the minimum point of AVC. b. MC cuts total cost at the minimum point of total cost. c. AVC cuts ATC at the minimum point of ATC. d. MC cuts ATC at the minimum point of ATC. e. average total cost (ATC) cuts marginal cost (MC) at the minimum point of MC. 2- A production function Select one: a. is an economic relationship between revenue and cost. b. shows the maximum level of output for a given set of inputs. c. always shows increasing returns to labour. d. shows the relationship between input prices and amount of input used. 3- Consumer surplus is defined as Select one: a. the excess of quantity supplied over quantity demanded at market prices above equilibrium. b. the excess of quantity demanded over quantity supplied at market prices below equilibrium. c. the difference between marginal revenue and marginal cost, summed over all units of output produced. d. the difference between the maximum amount consumers would be willing to pay and the actual amount paid for all units of a product consumed. 4- If consumers are willing to purchase a fixed quantity of a product regardless of the price, the demand is Select one: a. elastic. b. perfectly elastic. c. inelastic d. perfectly inelastic. 5- If the price of X goes from \$1.50 per dozen to \$2.50 per dozen, and suppliers are willing to increase the amount that they offer for sale in the market from 9,000 to 11,000 units, then the elasticity of supply for product X is Select one: a. 0.8 b. 0.10 c. 0.4 d. 4.0

## True OR False 1. Without government regulation of the private economy, average income will not grow over time. True OR False 9. Suppose income taxes rise only on incomes over

True OR False 1. Without government regulation of the private economy, average income will not grow over time. True OR False 9. Suppose income taxes rise only on incomes over \$250,000 annually. Then your after-tax income will be unaffected if your annual income is only \$100,000. True OR False 10. In order for observed prices to converge to competitive market clearing prices, the participants must understand what they are doing, so they don’t make mistakes in their buying or selling decisions.

## solve all Table 3: Demand Function Price Qd 12 0 9 11 6 22 3 33 0 44 13. Consider Table 3. Graph this demand curve. Make sure you fully

solve all Table 3: Demand Function Price Qd
12 0
9 11 6 22 3 33 0 44 13. Consider Table 3. Graph this demand curve. Make sure you fully label your graph.
Calculate the inverse demand function and the demand function.
is the quantity demanded if price is 8? Interpret this number. is the price elasticity of demand between a price of \$9 and \$12? also interpret this
number. Table 4: Supply Function Price Q5
12 32
9 24
6 16 3 8 0 0 14. Consider Table 4. a. Graph this supply curve. Make sure you fully label your graph. b. Calculate the inverse supply function and the supply function. c. is the quantity supplied if price is 8? Interpret this number. d. is the price elasticity of demand between a price of \$9 and \$12? also interpret this number. Table 5: Supply And Demand Functions Price Qd Q3
12 0 32
9 11 24
6 22 16
3 33 8
0 44 0 15. Consider Table 5. a. is the equilibrium price and quantity? b. The number of consumers increases. This causes consumers to demand two more goods at every
price. is the new equilibrium price and quantity? 16. Consider Table 5. a. Say there is a price ﬂoor of \$10. would be the result? A complete answer should mention
whether its binding, the amount sold in the market, and the existence / size of a shortage / surplus. b. Say there is a price ceiling of \$10. would be the result? A complete answer should mention
whether its binding, the amount sold in the market, and the existence / size of a shortage / surplus. 17. When income rises from \$50 to \$52, quantity demanded of chicken increases from 2 pounds
to 3 pounds a month. a. is income elasticity?
b. How do you interpret this number? c. How do you categorize this product? 18. When the price of cheese rises from \$2 to \$3 a pound, quantity demanded of salsa rises
from 2 to 4 bottles a month. a. is cross-price elasticity?
b. How do you interpret this number? c. How do you categorize this product?