Homework Questions
1) El Niño wind patterns affected the weather across the United States during the winter of 1997–1998.
Suppose the demand for home heating oil in Connecticut is given by Q = 20 – 2Phho + 0.5Png – TEMP, where
Q is the quantity of home heating oil demanded, Phho is the price of home heating oil per unit, Png is the price of natural gas per unit, and TEMP is the absolute difference between the average winter temperature over the past 10 years and the current average winter temperature. If the current price of home heating oil is $1.20, the current price of natural gas is $2.00, and the average winter temperature this year is 40 degrees compared to 28 degrees over the past 10 years.
A. What is the quantity of home heating
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3.) A regression of exports as a function of imports in 1991 across industry types yielded exports = 68 – 0.3(imports), R2 = .25, Prob > F = .26, F-critical =2.91
a.
If imports by an industry equal 60, what is the estimate of exports from this industry? 50
b.
How confident are you of your estimate? Explain. Not Very. The F-statistic is far below the critical value which means the coefficient are not jointly significant and since there is only one coefficient it will not be significantly significant. In addition the R-squared is fairly low and only explains 25% of the variation in exports.
c. How much of the variation is explained by the regression? 25%
4) Why Can’t We Be Friends? operates a conflict settlement service for distressed couples. If it has no fixed costs and its monthly average variable cost of cases is given by AVC = 2.5Q + 500. Its caseload is 50 conflicts.
a. What is the Average cost for this firm at this caseload? 625
b. What is the Marginal cost for this firm at this caseload? 750
5) Output is produced according to Q = 4LK, where L is the quantity of labor input and K is the quantity of capital input. If the price of K is $10 and the price of L is $5?
a. Does this production function exhibit constant, increasing or decreasing returns to scale?
Increasing
b. Estimate the cost-minimizing combination of K and L capable of producing 32 units.
L = 4 and K = 2. There are many ways to do this, the easiest is to is to calculate the marginal
product
So, we should reject the null hypothesis H0. At a 0.05 level of significance level, we conclude that there is a significant difference between the average height for females and the average height for the males.
Q5: What is the total unit cost and per unit profit for 1 kg of "complete male" at a retail price of Cr. 6,85 and with an allocation of cr. 1.20 for production fixed expenses?
6. How does the current reimbursement level of $140,000 per case affect a decision to use or not use marginal cost pricing? Does the amount of excess capacity affect the decision? Why?
Another issue is export. What proportion of the nation's output that is potentially exportable is in fact exported? One way to address this more narrow question is to begin with the domestic output of the goods-producing sectors of the economy, as measured by the value of final exports of goods, plus change in goods inventories,
14. If 11,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production?
effective cost of { [ (1 + .15/365)^365 ] - 1 } * 100 = 16.18% per year.
For MR = 0, Qw= 3498.65/0.3294 = 10621.28 and Qe= 2719.8714/0.065 = 41844.18. Hence Q = 52465.46.
In this study, t= -3.15 describes the mental health variable. It is significant because they are the variables being tested since the p value is 0.002 and the alpha is 0.05, the difference can cause the null hypothesis to be rejected.
As one determinant of GDP is exports, it is relevant to discuss the matter with relevance to the UK and Germany. As mention in the literature review, during 1955-1960 exports in Germany
The estimate of total potential market for heater/blower unit is 2737 units and 2737000 units for blankets (see exhibit 1). The direct cost of the heater/blower unit would be $380 and $0.85 per blanket. The initial investment, $500,000, for this system would cover the fixed cost of the company during first year of operation. Based on this basic information and other considerations, the company has to determine its pricing strategy for both
Despite this it ha exceeded its revised growth target of 4.9% (adjusted for temperature drop) by 1.9% and achieved 6.8% growth (calculation based on exhibit 1, 4 and 6 of the given case). On production end, Spain had several challenges. Firstly, it had to acquire new machineries, and secondly, Spain was forced to get 603 thousand litres of ice cream from France. This transfer, as mentioned above, was executed based on cash plus 5% profit causing an impact to Spain’s already challenged business situation.
We can assume the blanket price is $26, because the list from $20 to $26, and we don’t charge the heater/blower. Due to the good facility, we can set the market share at 15%, so the blanket unit =31,365*60%*15%/8=352.
In this case, level of significance, α was not provided. Therefore, the analysis will be evaluated based on two α values which are:
Most of the natural gas transportation in the USA is done through 305,000 miles of transmission pipelines. Existing LNG degasification facilities allow for limited international trade of LNG (Table 2). Due to free market pricing when natural gas cost less in summer period, gas-storing facilities are widespread over the country including more than 400 underground storages and 113 LNG peaking facilities (EIA, 2008).
d) The opportunity cost should be calculated as the resource cost of producing the input.