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| s = 1.361 R-sq = 91.62% R-sq(adj) = 90.8% Analysis of Variance SOURCE DF SEQ SS C2 1 420.25 C3 1 2.67 a. What is the intercept of the regression? b. What is the estimated regression coefficient of the product’s price? c. What is the estimated regression coefficient of disposable income? d. What is the multiple coefficient of determination? e. What is the standard error of estimate? f. What is the probability that the observed value of the F statistic could arise by chance, given that neither of the in de pen dent variables has any effect on the dependent variable? g. What is the probability, if the true value of the regression coefficient of price is zero, that the t statistic is as large (in absolute terms) as we observe? h. What is the probability, if the true value of the regression coefficient of disposable income is zero, that the t statistic is as large (in absolute terms) as we observe? i. Describe briefly what this regression means. |
The Kramer Corporation’s marketing manager calculates a regression, where the
The Miller Company uses skilled and unskilled labor to do
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| The Miller Company uses skilled and unskilled labor to do a particular construction project. The cost of doing the project depends on the number of hours of skilled labor and the number of hours of unskilled labor used, the relationship being C = 4 ? 3X1 ? 4X2 + 2X21 + 3X22 + X1X2 where C is cost (in thousands of dollars), X1 is the number of hours (in thousands) of skilled labor, and X2 is the number of hours (in thousands) of unskilled labor. a. Find the number of hours of skilled labor and the number of hours of unskilled labor that will minimize the cost of doing the project. b. If the Miller Company has to purchase a license costing $2,000 to do this project (and if the cost of this license is not included in C), will this alter the answer to part (a)? If so, how will the answer change? |
Carina buys two goods, food F and clothing C, with
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| Carina buys two goods, food F and clothing C, with the utility function U = FC + F. Her marginal utility of food is MUF = C + 1 and her marginal utility of clothing is MUC = F. She has an income of 20. The price of clothing is 4. a) Derive the equation representing Carina’s demand for food, and draw this demand curve for prices of food ranging between 1 and 6. b) Calculate the income and substitution effects on Carina’s consumption of food when the price of food rises from 1 to 4, and draw a graph illustrating these effects. Your graph need not be exactly to scale, but it should be consistent with the data. c) Determine the numerical size of the compensating variation (in monetary terms) associated with the increase in the price of food from 1 to 4. |
Let’s use the arbitrage equation to determine the price of
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| Let’s use the arbitrage equation to determine the price of a patent in a simple setting. Let R denote the interest rate, let pi denote the price of an “idea” that is under patent, and let Prof denote the extra profit that can be earned by a firm that owns this idea. (a) Set up the basic arbitrage equation that will ultimately pin down the value of the patent. On the left side show the return from investing pi dollars in a saving account. On the right, show the return from using these funds to purchase the patent. (b) Solve this equation for the price of the idea. (c) What is the economic interpretation of this result? |
Now suppose that the technological innovation occurs in the computer
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| Now suppose that the technological innovation occurs in the computer sector in the South: one unit of southern labor can now produce 10 computers instead of 2. (Other parameters take their original values.) (a) Does the North still have a comparative advantage in producing computers? If we allow these two economies to trade, will there be any reason for them to trade? Explain. (b) How does this change affect the North? In particular, compare northern economic performance before the southern innovation with northern economic performance after the innovation. (c) Discuss your findings: What do they mean for the case for free trade? (Be sure to note how the North would fare under autarky.) |
business-human-resource-management
Your company, a growing firm in the financial
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| Your company, a growing firm in the financial services industry, is extremely sensitive to the issues surrounding business ethics. The company wants to be proactive in developing a business ethics training program for all employees both to ensure the company’s reputation as an ethical company in the community and to maintain the industry’s high standards. As the HR Director and someone who values the importance of having all employees trained in the area of business ethics, you are in charge of developing the ethics training program. It needs to be a basic program that can be presented to all employees in the company. Resources for business ethics information can be found at www.business-ethics.org/primer1.html. What legislative act prompted many U.S. companies to develop internal ethical policies and procedures? |
Ajax, Inc. assembles gadgets. It can make each gadget either
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| Ajax, Inc. assembles gadgets. It can make each gadget either by hand or with a special gadget-making machine. Each gadget can be assembled in 15 minutes by a worker or in 5 minutes by the machine. The firm can also assemble some of the gadgets by hand and some with machines. Both types of work are perfect substitutes, and they are the only inputs necessary to produce the gadgets. a) It costs the firm $30 per hour to use the machine and $10 per hour to hire a worker. The firm wants to produce 120 gadgets. What are the cost-minimizing input quantities? Illustrate your answer with a clearly labeled graph. b) What are the cost-minimizing input quantities if it costs the firm $30 per hour to use the machine, and $10 per hour to hire a worker? Illustrate your answer with a graph. c) Write down the equation of the firm’s production function for the firm. Let G be the number of gadgets assembled, M the number of hour the machines are used, and L the number of hours of labor. |
The United States is considering adopting a regulation that foreign
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| The United States is considering adopting a regulation that foreign apples can be imported only if they are grown and harvested using the same techniques that are used in the United States. These methods are used in the United States to meet various government standards about worker safety and product quality. a. As a representative of the U.S. government, you are asked to defend the new import regulation before the WTO. What will you say? b. As a representative of foreign apple growers, you are asked to present the case that this regulation is an unfair restriction on trade. What will you say? |
It is a typical Christmas electronics shopping season, and makers
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| It is a typical Christmas electronics shopping season, and makers of flat-panel TVs are marketing the latest available models through their own Web sites as well as via retailers such as Best Buy and Wal-Mart. Each manufacturer offers its own unique versions of flat-panel TVs in differing arrays of shapes and sizes. As usual, each is hoping to maintain a stream of economic profits earned since it first introduced these most recent models late last year or perhaps just a few months before Christmas. Nevertheless, as sales figures arrive at the headquarters of companies such as Dell, Samsung, Sharp, and Sony, it is clear that most of the companies will end up earning only a normal rate of return this year. a. How can makers of flat-panel TVs earn economic profits during the first few months after the introduction of new models? b. What economic forces result in the dissipation of economic profits earned by manufacturers of flat-panel TVs? |
In the Argo Dam study, about 62% of the survey
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| In the Argo Dam study, about 62% of the survey population preferred to take down the dam, while 31% preferred to keep it, and 7% expressed no preference. For those who preferred keeping the dam, the estimated willingness to pay to keep it was $161/adult; those who wanted the dam removed would pay an estimated $135/adult to have it taken down. Ann Arbor has about 96,000 people. (a) Democracy is based on each person having one vote. If there were a vote in Ann Arbor on dam removal, what is the likely outcome if a representative fraction of the population votes? (b) If willingness to pay is a measure of how strongly people care about an issue, which group felt more strongly about whether to remove Argo Dam, those who wanted to keep the dam or those who wanted to remove it? Who would be more likely to show up to vote? (c) Use the above values to estimate whether the aggregate willingness to pay for keeping the dam was larger or smaller than the aggregate willingness to pay for removing the dam. Would this calculation produce a recommendation different than the outcomes in (a) or (b)? If so, what are some advantages and disadvantages of a decision based on (i) seeking high voter turnout from a representative share of the population, (ii) those who feel most passionate encouraging those who think like them to vote, or (iii) having the city council decide based on an analysis of whether net benefits are larger for keeping or removing the dam? |
