As part of his yearly financial planning, Stefen is thinking of investing $1,000 in a certain stock. From past data he knows that this stock either grows to $2,000 in one year (with the probability of 0.40) or goes down to $700 (with 0.60 probability). There is a mobile app that charges him for predicting whether the stock goes up or down. From customer reviews he has noticed that the app has predicted growth for 65% of the stocks that have actually grown. The app also accurately predicted shrinking of 90% of the stocks whose price actually went down. What is the maximum he should pay for the app (EVSI)

Which of the following is not an example of one of the four mail advantages of prices on a free market economy

Suppose that two firms produce differentiated products and compete in prices. as in class, the two firms are located at two ends of a line one mile apart. consumers are evenly distributed along the line. the firms have identical marginal cost, $60. firm b produces a product with value $110 to consumers. firm a (located at 0 on the unit line) produces a higher quality product with value $120 to consumers. the cost of travel are directly related to the distance a consumer travels to purchase a good. if a consumerhas to travel a mile to purchase a good, the incur a cost of $20. if they have to travel x fraction of a mile, they incur a cost of $20x. (a) write down the expressions for how much a consumer at location d would value the products sold by firms a and b, if they set prices p_{a} and p_{b} ? (b) based on your expressions in (a), how much will be demanded from each firm if prices p_{a} and p_{b} are set? (c) what are the nash equilibrium prices?

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