ECN 503 Study Guide - Final Guide: Sharecropping

248 views4 pages

ivoryscorpion759

12 Oct 2017

School

Department

Course

Professor

For unlimited access to Study Guides, a Grade+ subscription is required.

Document Summary

Some exercises on sharecropping and choice of techniques: consider a contractual setting with one landlord (d) and one tenant (t ). Technique 1: outcome is good with probability 3/4 and bad with probability 1/4. When outcome is good, the return is 100 and when it is bad, the return is 0. When outcome is good, the return is 150 and when it is bad, the return is 0. The cost of t for using technique 2 is 10. Consider a xed rental contract with rent r = 60. D leases land to t. t can carry out production by using one of the two production techniques: 1 or 2. Any technique results in one of the two outcomes: good or bad. The choice of techniques by t is not observed by d. Technique 1: outcome is good with probability 2/3 and bad with probability 1/3.

Related Questions

The engineers believe that, compared with the conventional sheet metal blanks, LBW would result in significant savings for the following reasons:

1. Scrap reduction through more efficient blank nesting on coil since the parts to be stamped out of the sheet metal can be patterned more closely.

2. Scrap reclamation since the unused sheet metal can be re-welded by laser into a usable blank.

On the basis of an annual volume of 3,000 blanks, Ford engineers have estimated the financial data provided in the table below.

	Blanking Method
Description	Conventional	Laser Blank Welding
Weight per blank (lb / part)	63.764	34.870
Steel cost / part	$14.98	$8.19
Transportation cost / part	$0.67	$0.42
Blanking cost / part	$0.50	$0.40
Die investment	$106,480	$83,000

The LBW technique appears to achieve significant savings, so Fordâs engineers are leaning toward adopting it. However, the Ford engineers have no experience with LBW, so they are not sure whether producing the windshield frames in this manner is a good strategy. For this windshield frame, it may be cheaper to use the services of a supplier that has both the experience with and the machinery for laser blanking. Fordâs lack of skill in laser blanking may mean that it will take six months to get up to the required production volume. If, however, Ford relies on a supplier, it can only assume that supplier problems will not halt the production of Fordâs cars. To be clear, Ford can select one of 3 options:

1) make the parts using conventional techniques;

2) make the parts using LBW techniques themselves; or

3) buy the parts from a subcontractor who will charge Ford a price per part with no volume discounts.

The subcontractor will use the LBW technique but does not disclose to Ford their costs. They will produce and deliver the parts to Ford in exchange for a per-part charge.

Assume a lifetime of 10 years and an interest rate of 16% to recommend the best course of action. If you use a Rate of Return approach, use 16% as the MARR. Assume that neither the conventional nor the LBW technologies have any salvage value. If Ford uses the subcontractor, what range of prices per part should they be willing to pay?

Please show work. Make assumptions when needed. Thanks

please answer every question fully if you understand it 1 and 2 For each part of this question, please refer to and use one of the following concepts in your answer

. â¢ Intertemporal Substitution of Labour Supply

â¢ Total Factor Productivity

â¢ Aggregate Production Function

â¢ Policy Ineffectiveness Proposition

â¢ Lucas Critique

â¢ Stochastic vs Systematic

(1) Consider an economy where the following occurs:

â¢ In even-numbered years, the money supply does not change

â¢ In odd-numbered years, the money supply increases by 10%.

Perhaps surprisingly, output does not vary from year to year, it remains constant. Unemployment does not vary from year to year, either. As for inflation:

â¢ In even-numbered years, inflation is 0%

â¢ In odd-numbered years, inflation is 10%

Illustrate a graph of aggregate supply and aggregate demand to show how the observed behavior of output and unemployment occurs when the economy switches from an even-numbered year to an odd-numbered year. Explain how and why this outcome occurs.

(2) In the same economy as above, in the year t (an odd-numbered year), the money printing press catches fire, and there is no change in the money supply. However, no one notices this until the end of the year.

Which of the following is the most likely rate of inflation in year t: 0%, 10%, or something between the two?

Which of the following is the most likely value of output in year t: the usual level of output, more output than usual, or less output than usual?

Explain why this result differs from the outcome in an even-numbered year. If it does not, why not?

I DO NOT WANT CALCULATION PART.

I need a clear and detailed briefing of this question by analyzing the problem by asking the below three questions.

Question: learning curves

Suppose you have a production technology that can be characterized by a learning curve. Every time you increase the production by one unit, your cost decreases by $6. The first unit costs you $64 to produce. If you receive a request for proposal (RFP) on a project for four units, what is your break-even price? Suppose that if you get the contract, you estimate that you can win another project for two more units. Now what is our break-even price for those two units?

Analyze the problem by using these three questions:

1. Who is making the bad decision? Why?

2. Does the decision maker have enough information to make a good decision? Why?

3. The incentive to do so? Why?

Answer to these questions will suggest solutions centered on:

1. Letting someone else make the decision, someone with better information or incentives

2. Giving the decision maker more information

3. Changing the decision makerâs incentives.

ECN 503 Study Guide - Final Guide: Sharecropping

Document Summary

Get access

Related Documents

ECN 503 Study Guide - Final Guide: Risk Neutral

ECN 503 Study Guide - Midterm Guide: Multidimensional Poverty Index, Human Poverty Index, Lorenz Curve

Law 2101 Lecture Notes - Lecture 27: Nipple

Related Questions