5. Brutus doesn't like lengthy speeches; his friend Cicero does like such speeches, at least to...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
5. Brutus doesn't like lengthy speeches; his friend Cicero does like such speeches, at least to a point. Every day they go together to the Senate House, where they listen to speeches together. Cicero's utility function is u(s, t) = 16s-s-t, where s is his speech consumption (hours per day, s>0), and t represents a payment from Cicero to Brutus (so if t is negative, Brutus is paying Cicero). Brutus's utility is v(s, t) = t-3s, where s (again) is his speech consumption (hours per day). Remember, they always listen to speeches together: that's what friends do. a. (8 points) Please graph this situation (including some indifference curves for both senators, as in Diagram of the Day 13), with s on the horizontal axis and t (which can be negative) on the vertical axis. Determine the contract curve (the set of Pareto or socially efficient points) for Cicero and Brutus. b. (6 points) Assume that transaction costs are zero. If Cicero has the right to listen to as many speeches as he pleases, what contracts between Cicero and Brutus are feasible? c. (5points) Assume that Brutus has the property right to the choice of s. What is the largest that transaction costs can be such that Brutus and Cicero still will enter into an agreement? 5. Brutus doesn't like lengthy speeches; his friend Cicero does like such speeches, at least to a point. Every day they go together to the Senate House, where they listen to speeches together. Cicero's utility function is u(s, t) = 16s-s-t, where s is his speech consumption (hours per day, s>0), and t represents a payment from Cicero to Brutus (so if t is negative, Brutus is paying Cicero). Brutus's utility is v(s, t) = t-3s, where s (again) is his speech consumption (hours per day). Remember, they always listen to speeches together: that's what friends do. a. (8 points) Please graph this situation (including some indifference curves for both senators, as in Diagram of the Day 13), with s on the horizontal axis and t (which can be negative) on the vertical axis. Determine the contract curve (the set of Pareto or socially efficient points) for Cicero and Brutus. b. (6 points) Assume that transaction costs are zero. If Cicero has the right to listen to as many speeches as he pleases, what contracts between Cicero and Brutus are feasible? c. (5points) Assume that Brutus has the property right to the choice of s. What is the largest that transaction costs can be such that Brutus and Cicero still will enter into an agreement?
Expert Answer:
Related Book For
Applying Communication Theory For Professional Life A Practical Introduction
ISBN: 9781506315478
4th Edition
Authors: Marianne Dainton, Elaine D. Zelley
Posted Date:
Students also viewed these economics questions
-
CANMNMM January of this year. (a) Each item will be held in a record. Describe all the data structures that must refer to these records to implement the required functionality. Describe all the...
-
"internet radios" for streaming audio, and personal video recorders and players. Describe design and evaluation processes that could be used by a start-up company to improve the usability of such...
-
31. Which combination of the compounds and their geometry are correct h) CIF, - V-shaped e) CIF, - Tshaped OB. a HeCl, - linoar 24. Which of the following havea bond angle smaller than tetrahodral...
-
What is the difference between Accounts Receivable and Revenue?
-
Find the limit of the following sequences or determine that the limit does not exist. {V(1+=} 2n,
-
SWIGART v. BRUNO CALIFORNIA COURT OF APPEALS 13 CAL. APP. 5TH 529 2017 According to the American Endurance Ride Conference, endurance riding is a highly competitive and demanding sport. It is...
-
Wash Clean Laboratories produces biodegradable liquid detergents that leave no soap film. The production process has been automated, so the product can now be produced in one operation instead of in...
-
A polar exploration team based near the south pole is faced with an emergency in which a very important housing and supplies module must be lifted by a special 1 crane, swung across a deep glacial...
-
Tree Seedlings has the following current-year purchases and sales for its only product. Date January 1 January 3 February 14 February 15 June 30 November 6 November 19 Activities Beginning inventory...
-
IT Express produces a range of notebooks and diaries that are sold exclusively online via the company's website. Customers have the opportunity to personalise their purchase by selecting designs for...
-
Consider the following binary tree. a) Give the corresponding postorder sequence b) Give the corresponding inorder sequence E to points
-
perfection ceramics purchased equipment used in the business three years ago for 48,000. They accumulated depreciation account related to the equipment asset account had a balance of $17,250. The...
-
As easy as it is to use credit, it is even easier to get into trouble with it. If you do you should: devise a realistic budget that includes a plan to pay of the balance. contact your creditors and...
-
Sebastian's 18-year-old child and his child's 17-year-old spouse had $800 of wages from part-time jobs and no other income. They lived with Sebastian all year. Neither is required to file a tax...
-
4. Explain what is the fractional reserve banking system and how it is different from a 100% reserve banking system?
-
Assuming the following: Null Hypothesis: = 5 3 x 7 a. Assuming = 1 and n = 25, what percent of the time will you: 1. accept the null hypothesis when it is true? 2. reject the null hypothesis when...
-
The time to assemble the first unit on a production line is 10 hours. The learning rate is 0.94. Approximately how long will it take for the seventh unit to be assembled? The number of hours needed...
-
Selena Framingham is a 24-year-old woman from the South. She was the first in her family to attend college, and she was very proud of the fact that she paid for her entire education by earning...
-
Jason was a man with a plan. Immediately after graduating from college, he created his own cleaning company. He started off cleaning houses doing all of the dirty work by himself, but over time, he...
-
For more than 80 years, Hope Medical Center had serviced its local residents as a privately run, not-for-profit community hospital. However, with the rapidly escalating cost of medical care, last...
-
Which of the following best describes the underlying rationale for a written investment policy statement (IPS)? A. A written IPS communicates a plan for trying to achieve investment success. B. A...
-
Which of the following is least important as a reason for a written investment policy statement (IPS)? A. The IPS may be required by regulation. B. Having a written IPS is part of best practice for a...
-
Which of the following is least likely to be placed in the appendices to an investment policy statement (IPS)? A. Rebalancing Policy. B. Strategic Asset Allocation. C. Statement of Duties and...
Study smarter with the SolutionInn App