Question: I need help with f, g, and h only please. Thanks! Abigail is holding a yard sale before she moves out of Nashville. Among other

I need help with f, g, and h only please. Thanks!

Abigail is holding a yard sale before she moves out of Nashville. Among other items, she is selling some used video games. Bing Yang attends the yard sale and is considering buying a video game, although he has no way to tell the quality of the game before purchasing.

Suppose the following: let quality of video games, q, be distributed q U [0, 2], UA = 3q, and UB = 4q.

(a) If Abigail sets a price of p, what is Bing Yang's updated belief on the expected quality of the video game?

(b) What is Bing Yang's willingness to pay?

Now, suppose that Bing Yang leaves and Catherine, who has utility function UC = 8q, visits the yard sale and is considering buying the used video games.

(d) What is Catherine's willingness to pay? (e) Will trade take place in equilibrium? If so, what quality of video games will be sold?

Next, suppose that Demetrius is holding a separate yard sale and selling used video games with quality, q, distributed q U[1,3]. Suppose that UD = 3q. Begin by assuming Bing Yang visits Demetrius's yard sale.

(f) If Demetrius sets a price of p, what is Bing Yang's updated belief on the expected quality of the video game?

(g) What is Bing Yang's willingness to pay?

(h) Will trade take place in equilibrium? If so, what quality of video games will be sold?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary, Gene, and Pat, who share income in the ratio of 6:3:1, are Mary $ 240,000 Gene 120,000 Pat 40,000 Required: a....

111 100% + si Case (1).pdf Coke versus Pepsi Case study: Please note that even though it is a team exercise, and you will be tempted to divide and conquer, it is extremely important that every member...

I need to create an executive level report on the internal management of Belk. Inc. My assignment is that I am looking to acquire Belk, What information and analysis do I need to have in this report?...

I have attached the corresponding lessons for assignment 8, it usually includes practice problems at the bottom that look similar to the assignment. ASSIGNMENT 7 JOB ORDER COSTING Directions: After...

The excel homework assignment below has five tabs that cover five different topics: Net Present Value Analysis, Capital Budgeting and Cost of Capital, Working Capital, Management, Financial Ratio...

Need help solving this. These quesitons are based on 2014 for U.S. Tax Question 2 (15 marks) Roxie and Logan were divorced in 2012. They have two children, nine-year-old Byron and 21-year-old...

171 100% + i Case (1).pdf Coke versus Pepsi Case study: Please note that even though it is a team exercise, and you will be tempted to divide and conquer, it is extremely important that every member...

Questions: 1. Identify the key criteria and considerations that need to be taken into account in evaluating BFSI entry in the proposed foreign markets. 2. Of the countries under consideration, which...

Please show your work. A B C D E F G H J K L M N o F 1 Q1: 2 An important task in performing business valuations is normalizing the historical financial statements. (a). Using the information...

(0, 2), (1, 3), (2, 6), (3, 11), (4, 10). Graph the given points and say which point does not seem to fall on the graph of a simple function.

How many permutations of 1, 2, 3, 4, 5, 6, 7 are not derangements?

CammIMS 1 6 4 . TB . 0 1 3 . The primary limitation of linear programming's applicability is the requirement that all decision variables be nonnegative. TrueFalse

Frisco Property Management is a hypothetical company that manages large number rental properties in the northern suburbs of Dallas. The company is outfitting a new administrative office and needs to...

TT&A, Inc. is a call center that manages its customers requests over the telephone. The number of calls for each working day for the past three weeks is imputed into the EXCEL worksheet as shown....

While most of your friends in college have dreams of going into corporate positions, you have always wanted to start your own business and be your own boss. After some preliminary study at the US...

The Supreme Court issues an opinion that the ban on private insurance is unconstitu- tional, but that the NHIP can continue to operate. Camille decides to go into business for herself and start a...

There are number of the general trends and challenges in the Manufacturing Industry that companies come across, some of are: 1. Leveraging data and analytics in a new business model 2. Innovative...

Identifying How Machine Learning Can Solve Problems What problem would you like your machine learning model to solve? What output would you like your machine learning model to produce? How will you...

2. Now list, after going through a-c, three things that you want to be the impres-sion you want others to be left with after meeting you, and that you want to be lasting over time. List four points...

Relax your shoulders

Keep your head straight on your shoulders