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Many people think that liability for accidents should be based Many people think that liability for
accidents should be based in part on negligence. For example, a negligence rule might state
that if two cars collide while one driver is following traffic laws while the other is not, the second
[…]
For each of the externalities you listed in your answer For each of the externalities you listed in
your answer to Discussion Question 1, identify the missing market or markets that are
responsible for the externality. Would it be possible to create such a market? If so how? If not,
[…]
One aspect of the 2007-2009 financial panic was a run on some money market mutual funds
(MMMFs). Plot weekly data for 2008 on institutional MMMF deposits (FRED code: WIMFSL)
and identify the timing of the run visually. Next, download the data, and report the size of the
deposit outflow in […]
Suppose that the demand functions for Coke and Pepsi are Suppose that the demand functions
for Coke and Pepsi are the same as in Worked-Out Problem 19.2 but that each firm’s cost
function is C(Q) = 0.10Q + 0.004(Q2). What are Coke and Pepsi’s Nash equilibrium prices?
What are their […]
Firms A and B are duopolist producers of widgets The Firms A and B are duopolist producers of
widgets. The cost function for producing widgets is C(Q) = Q2. The market demand function for
widgets is Qd = 192P-2, where Q measures thousands of widgets per year. Competition in the
[…]
Suppose that the demand for Coke and Pepsi in a Suppose that the demand for Coke and
Pepsi in a small city are given by formulas (16) and (17). The marginal cost is $0.30 per can.
Find the Nash equilibrium prices, expressing them as a function of D. How does […]
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