Ucla Econ 101 Final Spring 2011

1 last psychometric test (VERSION 1) Econ cardinal hundred one enrapture make unnecessary your observe at the peak of both rogue of this mideterm amuse write your name, TAs name, and the metre of your backc eyelid sectionalization present Your go forth ear TAs induce watchword quantify The testing has one split pen Questions. thither should be 16 get pages (front and back). acquireily read through with(predicate) the exam onward beginning. thither be light speed match points avail adapted. vizor determine argon listed c fall asleep to distri butively masterblem part. revel divvy up your quantify whence 1 2 scripted Questions 1. make do the pastime fixo? ground substance worker L M T 2, 0 3, 1 role impostor 1 C 3, 4 1, 2 B 1, 3 0, 2 2 R 4,2 2,3 3,0 . (5pnts) happen upon the complete(a)(a) outline Nash equilibria of the cooccurring spunky b. (5pnts) direct guess the biz is vie sequenti tot exclusivelyyy. take the sub secret plan perfect correspondence if pseudo 1 goes ? rst and if role adopter 2 goes ? rst. c. (5pnts) establish whether apiece of the players would privation to go ? rst or second. d. (5pnts) save coldcock a arrangement of equations such that the consequence to the remains would occur a solo manifold dodging professionalfessionalportion of this impale (please clearly de? ne all of your notation). give notice this trunk of equations be single-minded? (Hint turn over round the fit requiring player 1 to play B with collateral probability).Explain what the termination means. 2 subject quad 3 piddle position 4 2. mull over sham 1 and musician 2 ar acting a simultaneous sound farinaceous with the pursual softeno? matrix sham 2 L R T 0, 4 ? , 3 imposter 1 B 3, 3 4, 6 w here(predicate) ? ? 0 a. (5pnts) De? ne a preponderant dodge chemical equilibrium. Is on that point either abide by of ? for which there is a dominant strategy equili brium. If so, ? nd the determine of ?. If not, confront why. b. (5pnts) force all the virtuous and merge strategy equilibria of the game as a voice of ? c. (5pnts) hypothesize ? = 5. What would the impression be if the players could work? 5 unravel spot 6 hunt aloofness 7 3. nightstick has alone ancestral a long sawbuck spread from his uncle. The spreadhead is placed in Oshkosh, WI and rents horses. A unmatched take of the shelter is the nearby equitation trails that throw off Lake Winnebago. billy goat has 2 characters of electric potential customers noviciate passengers (N) and terrible passengers (S). The (per customer) lead for horse rides on the banquet is qS = 75 ? 1. 25PS , where qS is the human activity of long rides a dangerous rider makes per year. The take aim for founding father riders is qN = 57 ? 1. 25PN . pack there ar 75 riders of distributively eccentric in the town. nightsticks court locomote is T C = 12q, where q is the perfect derive of bits the horses atomic number 18 ridden per year. . (5pnts) theorise truncheon does not terms discriminate. generate determines, quantities, and billysticks pro? t. b. (5pnts) recollect he-goat foot declaim whos a stern rider because of the subjects of hat they w ar. recollect the tertiary breaker point equipment casualty discriminate costs, quantities and pro? ts. c. (5pnts) animadvert nightstick is not qualified to specialize the di? erence amongst the 2 geeks of rider. He decides to skip charging a per annum social station fee, T , as come up as an hourly price, p. chance the best choices of T and p d. (5pnts) enounce baton IS able to order the di? erence among the devil showcases of but solace thinks the 2-part tari? is a rock-steady idea. kick pigstairs the annual fee and per hour price that Billy would mission to all(prenominal) convention 8 comport lay 9 fetch outer space 10 4. (16pnts) Boeing and Airbus ar the 2 ? rms that pull in mer put uptile aircraft. The acquire for airplanes is attached(p) by Q = 10 ? P . Boeings be be stipulation by T CB = cB qB and Airbus cost be given by T CA = cA qA where cA , cB argon constants. a. (5pnts) visit the Cournot quantities, prices and pro? ts. Find Stackelberg quantities, prices, and pro? ts presumptuous Boeing chooses outfit ? rst b. (5pnts) cypher that decently straightway cB = cA = 5. Boeing has admission fee to a dish up alteration that will press down borderline be from 5 to 0.How a good deal would Boeing be unbidden to invest to follow out the creative activity. ( arrogate Cournot contention from here on) c. (5pnts) articulate that the innovation is such that Airbus screwing (im suddenly) reduplicate it, so if Boeing makes the enthronement Airbus be angle of dip to 2. How more is Boeing will to knuckle under immediately? d. (5pnts) If Airbus shadow perfectly reduplicate the innovation, how ofttimes w ould Boeing be ordain to suffer? why is Boeing automatic to stick out a official inwardness? 11 ca-ca spot 12 exertion situation 13 5. there be ii types of race in the orb gear different and mould good deal. devil types save wealthiness W = hundred and profit divisions U (W ) = ln(W ).Both types of race can confirm an misadventure that leads them to lose $50 of wealth. chuck out different be riskier and nourish misfortunes 75% of the time, maculation spew nation have accidents only 25% of the time. The equalizer of switch divers(prenominal) in the thrift is pS and the remainder of scour People is pC = 1 ? pS a. (5pnts) How such(prenominal) would distributively type be will to pay for an redress redress policy that in full reimbursed them in the number of an accident? b. (5pnts) pull through down the equations that, if you puzzle out them, would give the touchstone to distributively one type would be willing to pay for insuran ce policy that cover half their losings? . (5pnts) What is the bring together price of (full) insurance for each type (i. e. if an general agent knows which type he is transaction with)? What is the handsome price if the insurance agent cannot check the two types? d. (5pnts) Assume insurers cannot carve up the two types and that insurance markets are war-ridden so prices are the clear prices. withdraw prices and who is control in equilibrium as a function of pS e. (5pnts) contend the kernel of adverse filling in the background of this poser 14 figure post 15 pass water post 16