Social Security _____. a. reduces the incentive to save b. ...

[stevenposner]

Social Security _____.
 
  a. reduces the incentive to save
  b. increases the incentive to save
  c. has no effect on saving
   d. increases the incentive to save when population growth is falling and decreases the incentive to save when population growth is falling

Question 2

Suppose the demand for pizza in a small isolated town is p = 10 - Q. There are only two firms, A and B, and each has a cost function TC = 2 + q. Determine the Cournot equilibrium.
 
  What will be an ideal response?

[trog]

Answer to Question 1

a

Answer to Question 2

Firm A's profit is  = 10 - (qA + qB)qA - 2 - qA. Maximizing with respect to its own output yields qA = 4.5 - qB/2. Similarly, firm B's best response is = 4.5 - qA/2. The equilibrium occurs when both firms produce 3 units. Price is 10 - 3 - 3 = 4.