Class Notes (837,359)
United States (324,989)
Economics (213)
ECON-UA 2 (82)
Lecture

Day 22 (4/29/14)
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Department
Economics
Course
ECON-UA 2
Professor
Marc Lieberman
Semester
Spring

Description
Day 22 42914ClosingNotesonOligopoliesDeltaSafety No SafetyAddsAdsAVery High ALowDVery Safety AdsDLowLownAVery acLow ireNo Safety DVery AMediummDMediumAdsHighAIt would make sense for each company to run safety ads Yet this doesnt happen because its agreed upon to not go there It would be bad for both to get into competition over safetyMovingonPresent ValueWhat is the value of 1000 to be received in the futureChoicea1000 Nowb1000 1 Year from nowYou should prefer A because assuming there is positive interest rate you can convert it into more than a thousand in a year Postponing is sacrificing interestWhat is the number of dollars x received today that has the same value to you as 1000 to be received I year from now Same as What is the present value of 1000 in 1 yearAssume for now1One interest rate in economyR102You can borrow and lend at that interest rate3There is no uncertaintyFor x to be the PV of 1000 in one year x1101000x10001190909PV of Y in one yeary1r
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