MGEB11H3 Lecture Notes - Lecture 4: 3 Ft Gauge Rail Modelling, Sample Space, Bulgarian State Railways

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tauperabbit508

6 Mar 2020

School

UTSC

Department

Economics for Management Studies

Course

MGEB11H3

Professor

Victor Yu

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Arandom experiment before theend ofexperiment is an experimentsuchthat the outcomes cannot be determined with certainty. A sample space is a set of all possible outcomes in a random experiment. An event is a subset of a sample space sample space. Lot s be a sample spacef is an event in s define the probability of e denotedbypce as. Number of outcomes in e number of outcomes in 5 assuming thateach outcome in s is equally likely toappear. E a at thatthesumof thetwo numbersequal to 10 ormore curb css c5,6 cb4316,6. E eventthat the 3 appears in anoddnumbered toss. Example3 we select a number between 0and aincluding 0 and i so ex el. Aub a orb the set ofoutcomes ina or in b or inbotha and b. Aab ab the set ofoutcomes inbothaandb whenanb 0 we say a and b are mutuallyexclusivecdisjoint. C suppose asb aremutually exclusive then planb pco 0.

Related Questions

(25 pts) Suppose that the market is comprised of 4 groups of people of differing risk categories. Individuals know their own risk, but insurers cannot tell which group a person belongs to. Each individuals has a current income equal to $40,000 and faces a risk of requiring medical treatment costing $7,600. Each individual has an utility function given by U = X1/2 Each groupâs probability of requiring medical treatment is as follows:

Group 1 2 3 4 # of People 1,000 1,000 1,000 1,000 Probability of Medical Treatment 0.20 0.40 0.60 0.80 a. (

5 pts) What is the most money each group will be willing to pay for an insurance policy that fully insures them in the event they require medical treatment (premium)?

b. (4 pts) What is the expected loss for each group? How does it compare to their maximum willingness to pay for insurance? Why are these different? c. (4 pts) What is the average riskiness of a person seeking insurance? If an insurance company were to charge all its clients the same premium to fully insure them, what would the fair premium be? Which group(s) would buy insurance at this price? Why?

c. (4 pts) What is the average riskiness of a person seeking insurance? If an insurance company were to charge all its clients the same premium to fully insure them, what would the fair premium be? Which group(s) would buy insurance at this price? Why?

d. (4 pts) What is the average riskiness of the persons now seeking insurance? (the group(s) identified in the last part of question (c) above). What would be the new fair premium that the insurance company would charge all its clients? Which group(s) would buy insurance at this price? Why? e. (4 pts) What is the average riskiness of the persons now seeking insurance? (the group(s) identified in the last part of question

(d) above). What would be the new fair premium that the insurance company would charge all its clients? Which group(s) would buy insurance at this price? Why? f. (4 pts) Is this an efficient outcome? Explain. Describe the different options the firm has to address this problem.

jadedonkey623

Individals are of two di Â§erent abilities: high (H) and low (L). An individual knows his or her own

ability but an employer does not. Employers believe that both types of individuals are equally likely

in the population, and therefore has an initial (prior) belief that an individual is high ability with

probability 1. Before an individual looks for a job, he or she has an opportunity to go to college. 2

Assume that attending college does not change an individualiÃs ability; this problem shows that even in

this circumstance, college can perform a useful social function. The e Â§ort cost of attending college is

di Â§erent for individuals of di Â§erent abilities. In order to attend college, high ability individuals must

expend e Â§ort 1, and low ability individuals must expend e Â§ort 1, where a < 3 (this means that a 3a

low ability individual has a higher cost of attending college). Not attending college costs 0. After

observing an individualiÃs education (that is, whether he or she attended college) an employer makes

the individual a job o Â§er. The wage that the individual receives is equal to the employeriÃs belief that

the individual is high ability, given the level of schooling that the individual has chosen to acquire. For

example, if the employer believes that a college graduate is high ability with probability 2 he will o Â§er 3

a college graduate a wage of 2 . If he believes that an individal with no college education is high ability 3

with probability 1 , he will o Â§er an individual without college a wage of 1 : An individualiÃs payo Â§ is 44

equal to his wage, minus the cost of education..

First consider a separating equilibrium. In a separating equilibrium, high ability individuals attend college, but low ability individuals do not.

(a) If the employer observes that an individual did not attend college, what is his belief about the individualiÃs ability? What wage will he o Â§er individuals who do not attend college?
(b) If the employer observes that an individual did attend college, what is his belief about the indi- vidualiÃs ability? What wage will he o Â§er individuals who attend college?
(c) Given the wages paid to college graduates and those who do not attend, will the high-ability individual chooose to attend college? (Hint: compare the payo Â§ of attending college for the high ability graduate to the payo Â§ of not attending college)
(d) Given the wages paid to college graduates and those who do not attend, for which values of a will the low-ability individual chooose to attend college? (Hint: compare the payo Â§ of attending college for the low ability graduate to the payo Â§ of not attending college)
(e) In a separating equilibrium, a low ability individual does not attend college. For which values of a is this expectation consistent with the low ability individualiÃs strategy?

Now, consider a pooling equilibrium in which all individuals attend college; that is, both high and low ability individuals attend college. If some individual were to choose not to attend college, the employer would believe that he or she must be low ability, and would o Â§er a wage of 0.
(f) If the employer observes that an individual attended college, what is his belief about the individ- ualiÃs ability? What wage will he o Â§er to college graduates? (Hint: The employer expects that all individuals attend college. This means that attending college conveys no information about the individualiÃs true ability).
(g) Given the wages paid to college graduates (and the wage that would be paid to non-grads) would the high-ability individual choose to attend college? For which values of a would the low ability individual choose to attend college?
(h) In a pooling equilibrium, both high and low ability individuals attend college. For which values of a is this expectation consistent with the individualsiÃstrategies?

Finally, consider a sem-separating equilibrium in which high-ability individuals attend college (for sure), but low ability students attend college with probability 0 < s < 1:
(i) If the employer sees that an individual attends college what is his belief that the individual is high-ability? What is the wage to college graduates? (Hint: Remember, all high ability individuals attend, but low ability individuals attend with probability s. Divide the probability of an individual being high ability and attending college by the overall probability of an individual attending college).

(j) If the employer sees that an individual did not attend college, what are his beliefs about the individualiÃs ability? (Hint: all high ability individuals attend college)
(k) The low-ability individual is willing to randomize between attending college and not attending college. Use this to OÃËnd the probability that the low-ability individual attends in equilibrium.

Bonus: Comment on the purpose of college illustrated in this example. How is this purpose a Â§ected as college becomes easier for the low-ability type (i.e. as a increases)?

lavendergnat675

AEC 316 - Agricultural Marketing
Homework Assignment 2: Chapter 2

Name:____________________ Date:____________________

Multiple choice questions.

There is only one correct answer in multiple choice questions. Please, mark the correct

answer. Each multiple choice question is worth 5 points.

1. A perfectly competitive firmâs demand curve equals its:

Marginal cost curve

Average variable cost curve

Average fixed cost curve

Average revenue curve

None of the above

2. A perfectly competitive firm maximizes profits by setting price equal to:

a. Marginal cost

b. Marginal revenue

c. Average revenue

d. Average total cost

e. Average variable cost

3. In order for a monopoly to continue to be a monopoly:

a. The marginal revenue curve must be downward sloping

b. There must be no close substitutes

c. Marginal revenue must equal marginal costs

d. Average total costs must be decreasing

e. None of the above

4. Marketing strategy which involves dividing a broad target market into subsets of consumers who have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them.

a. Brand name

b. Minor ingredients

c. Market segmentation

d. Product features

e. Packaging

5. What characteristic is indicative of oligopolies?

Low profits

Interdependence of firms

Many firms

Entry is blocked

None of the above

6. At an equilibrium price:

a.The self-interest of consumers is maximized

b.Supply equals demand

c.There is an upward pressure on price

d.There is a downward pressure on price

None of the above

7. When both supply and demand increase, equilibrium quantity will:

a.Decrease

b.Increase

Stay the same

Canât say

None of the above

8. Elasticity is a concept that deals with:

a.Market structure

b.Market equilibrium

c.Perfect competition

d.Consumer and producer sensitivity to changes in prices and income

None of the above

9. A set of competing firms producing similar products or a commodity in a market is called a(n) ___ .

a.Branch

b.Competition

c.Channel

Industry

None of the above

10. A market structure where there is only one buyer of a specific product is called:

a.Monopsony

b.Monopoly

c.Oligopsony

Monopsonistic competition

None of the above

Essay question: 50 points

11. Use the agricultural commodity that you selected in Chapter 1 and choose one agribusiness that buys it. Investigate the agribusiness using the Internet and other resources, and then write an essay addressing all or as many as possible of the following aspects of the agribusiness:

Size

Sales

Scope of product line

Worth (if public)

Number of employees

Locations globally

Market structure

Industry sector

All your answers/discussion should be typed in one essay that is at least 15 lines long (using formal English, correct paragraph and sentence structure, and making sure your ideas flow well from one sentence to another) using Times New Roman, 12 point, double space and 1-inch margins all around. Before submitting the final essay, use the âSpelling & Grammarâ function of the MS Word to correct grammar.

At the end of your essay, provide the full citation record in alphabetical order in your list of references. For examples, visit: http://www.saea.org/wp-content/uploads/2013/08/reference-style-sheet.pdf. Please, note that the list of references does not count toward the minimum required 15 lines. Include your references in the text as â(Smith, 2015)â when citing at the end of a sentence, or âAccording to Smith (2015)â when citing at the beginning of a sentence. For example,

Negative publicity is a key determinant affecting consumersâ buying decisions (Ahluwalia, Burnkrant, and Unnava, 2000).

According to Cawley and Rizzo (2005), pharmaceutical products in the same therapeutic class experienced negative spillover in terms of lost sales.

Note: Most of the future essay questions will build on this essay question and/or the one agricultural commodity that you choose. This means that if there is little information on the agricultural commodity that you have chosen for this essay question, you should consider choosing a more common agricultural commodity on which ample information is available. In addition, this course will require you to compile all your answers to the essay questions into one term paper to be submitted by the end of the course. This means that the more effort you put into answering essay questions now, the more material you will have accumulated for your term paper by the end of the semester.

TYPE YOUR ANSWER TO THE ESSAY QUESTION 11 BELOW USING AS MUCH SPACE AS YOU NEED. THEN, PRINT THE HOMEWORK ASSIGNMENT AND SUBMIT THE HARD COPY.

MGEB11H3 Lecture Notes - Lecture 4: 3 Ft Gauge Rail Modelling, Sample Space, Bulgarian State Railways

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