In today’s economy, it’s harder for workers to get promoted. In 2006, it took an average of 2 ½ years to get a promotion; today it takes 4 ½ years. As a result, fewer workers are willing to boost their productivity in an effort to impress the boss and get the promotion. In 2006, 25 percent of employees said they were willing to give “an extra oomph” at work (boost their productivity); today about 15 percent are willing to do so. Explain the connection to the Phillips curve.

In today’s economy, it’s harder for workers to get promoted. In 2006, it took an average of 2 ½ years to get a promotion; today it takes 4 ½ years. As a result, fewer workers are willing to boost their productivity in an effort to impress the boss and get the promotion. In 2006, 25 percent of employees said they were willing to give “an extra oomph” at work (boost their productivity); today about 15 percent are willing to do so. Explain the connection to the Phillips curve.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.2P

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In Autarka 2 amusement parks, Alfonso's wonderland and Bernice's rides there are 9600 people who like to visit an amusement park. Each of theseconsumers wants to visit one park once. The consumers' homes are evenly spaced acrossthe island, and they each suffer a disutility of $24 for each kilometre they travel to reachan amusement park. With their current technology, it costs an amusement park $12 for each customer theyhost. At present, the equilibrium price for an amusement park ticket is $36, and each firmhas a profit of $115,200. This market is best modelled as Hotelling competition. Fixed costs should be neglected. Treat this market as a one-shot game. Do not consider repetition or associated phenomena such as collusion or predatory pricing. Assuming Bernice's rides has a profit function of Nb(Pa,Pb) = 200(PaPb - Pb^2 + 36Pb -12Pa - 288), what is Bernice's rides best response function?
In Autarka 2 amusement parks, Alfonso's wonderland and Bernice's rides there are 9600 people who like to visit an amusement park. Each of theseconsumers wants to visit one park once. The consumers' homes are evenly spaced acrossthe island, and they each suffer a disutility of $24 for each kilometre they travel to reachan amusement park. With their current technology, it costs an amusement park $12 for each customer theyhost. At present, the equilibrium price for an amusement park ticket is $36, and each firmhas a profit of $115,200. This market is best modelled as Hotelling competition. Fixed costs should be neglected. Treat this market as a one-shot game. Do not consider repetition or associated phenomena such as collusion or predatory pricing. Find the profit function for Alfonso's Wonderland for the case in which their marginal cost is $6.
In Autarka there are 9600 people who like to visit an amusement park. Each of theseconsumers wants to visit one park once. The consumers' homes are evenly spaced acrossthe island, and they each suffer a disutility of $24 for each kilometre they travel to reachan amusement park. With their current technology, it costs an amusement park $12 for each customer theyhost. At present, the equilibrium price for an amusement park ticket is $36, and each firmhas a profit of $115,200. This market is best modelled as Hotelling competition. Fixed costs should be neglected. Treat this market as a one-shot game. Do not consider repetition or associated phenomena such as collusion or predatory pricing. Derive an expression for the location of the indifferent consumer. Use PA to represent the price of admission at Alfonso's Wonderland, and PB to represent the price of admission at Bernice's Wild Rides.
In Autarka there are 9600 people who like to visit an amusement park. Each of theseconsumers wants to visit one park once. The consumers' homes are evenly spaced acrossthe island, and they each suffer a disutility of $24 for each kilometre they travel to reachan amusement park. With their current technology, it costs an amusement park $12 for each customer theyhost. At present, the equilibrium price for an amusement park ticket is $36, and each firmhas a profit of $115,200. This market is best modelled as Hotelling competition. Fixed costs should be neglected. Treat this market as a one-shot game. Do not consider repetition or associated phenomena such as collusion or predatory pricing. Find the profit function for Bernice's Wild Rides. Assuming that Bernice's marginal cost is $12.
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