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USPshnik [31]
2 years ago
11

Arisk-neutral consumer is deciding whether to purchase a homogeneousproduct from one of two firms. One firm produces an unreliab

le product andthe other a reliable product. At the time of the sale, the consumer is unable todistinguish between the two firmsîproducts. From the consumerîs perspec-tive, there is an equal chance that a given firmîs product is reliable or unreli-able. The maximum amount this consumer will pay for an unreliable productis $0, while she will pay $50 for a reliable product.
a. Given this uncertainty, what is the most this consumer will pay to purchaseone unit of this product?
b. How much will this consumer be willing to pay for the product if the firmoffering the reliable product includes a warranty that will protect the con-sumer? Explain
Business
1 answer:
MatroZZZ [7]2 years ago
5 0

Answer:

Uncertainty over Reliable and Unreliable Product

a. Given this uncertainty, the most this consumer will pay to purchase one unit of this product is $25

b. The amount that this consumer will be willing to pay for the product if the firm offering the reliable product includes a warranty that will protect the consumer is $50.

c. This is because the stated maximum amount that the consumer is willing to pay for the reliable product is $50.  She is not prepared to spend more than this amount on the reliable product.

Explanation:

a) Data and Calculations:

                                                                    Unreliable     Reliable

Maximum amount the consumer will pay      $0              $50

Probability of reliability                                    0.5              0.5

Expected amount to pay for either product  $0              $25 ($50 * 0.5)

a. Given this uncertainty, the most this consumer will pay to purchase one unit of this product is $25 ($0 + $25)

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Answer:

ending work in process and the cost of units transferred out.

Explanation:

In a cost reconciliation schedule, costs accounted for is computed by adding the cost of the ending work in process and the cost of units transferred out.

The cost reconciliation schedule gives the relationship between total costs accounted for and total costs to be accounted for.

When the total costs accounted for equal the total costs to be accounted for, this is a cost reconciliation schedule.

8 0
3 years ago
Some economists believe that permanently lower marginal income tax rates __________ the incentive to work and thus shift the ___
gtnhenbr [62]

Answer:

The answer is "increase; LRAS curve to the right".

Explanation:

The curve LRAS represents the flow between all the level of wages and economic GDP supplied because all prices are fully flexible, also with nominal salaries; its cost may change all along LRAS, however, the output cannot, as it represents the complete output of workers, that's why the several economists say that lower marginal rate consistently increases the motivation to work, shifting the LRAS curve to the left.

6 0
2 years ago
Lindsay and Sandy run a landscaping firm that cuts lawns and prunes trees. Lindsay is more productive than Sandy at both tasks.
ELEN [110]

Answer:

True

Explanation:

A person (or company or country) must specialize in the production of the good or service for which they possess a comparative advantage.

Lindsay has an absolute advantage in both cutting lawns and pruning trees, but that doesn't mean that she has a comparative advantage at both.

7 0
3 years ago
Which of the following is an example of a market segment?
Hatshy [7]

Answer: The answer is "b. A group of individuals with different product requirements".

Explanation: The definition of a market segment refers to a homogeneous and large group of consumers that can be recognized within a market, who have similar desires, buying habits, and who will react similarly to the power of marketing.

4 0
3 years ago
During the meeting, the manager exclaims "I am in charge" in order to initiate structure, set goals, assign tasks, and take conc
mart [117]

Answer:

<u>Directive.</u>

Explanation:

House's original path-goal theory is based on the theory that the behavior exerted by the leader must be adjusted according to the work environment and the employees, so that there is motivation, satisfaction and improvement in the performance of the employees to achieve of goals.

According to House and Mitchel, there are four styles of leaders:

  1. Directive,
  2. Supportive,
  3. Participative, and
  4. Achievement.

So on this issue, the leadership style that best fits is the directive leader.

In this leadership style, it is the leader who provides the guidelines for the development and execution of tasks, and the coordination of work. The leader provides clear goals and expectations about performance to achieve the expected results.

5 0
3 years ago
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