1. A logging operation needs 4 worker-hours (L) per 2 crane-hours (K) to move one batch of a hundred logs in an hour.
1.1. Write down the total cost function for the firm (as a function of K and L), given that the hourly wage (w) is $12 and the lease on the crane (r) is $48 an hour. The firm paid $5000 to have the right to log the area.
1.2. Graph one isocost line with (K) in the vertical axis. Identify which is more expensive.
1.3. What is the slope of the isocost line? (be aware of which input is in the vertical axis)
1.4. Write down the production function for the logging company, where the output is the number of batches of hundred logs moved per hour.
1.5. Graph one isoquant for this production function.
1.6. What is the (numeric value) Marginal Rate of Technical Substitution? (again, be aware of which input is asked to be in the vertical axis)
1.7. Does this firm’s production function display increasing, constant or decreasing returns to scale?
1.8. Suppose that the firm wants to minimize their total cost while being able to move θ (where θ is some generic number) batches of one hundred logs an hour: how many cranes and how many workers would it use?
1.9. Write down the firm’s total cost (TC), variable cost (VC) and fixed cost (FC) functions, as a function of θ.
1.10. In one plot graph the firm’s TC, VC and FC.
1.11. Write down the firm’s average total cost (ATC), average variable cost (AVC), average fixed cost (AFC), and marginal cost (MC) functions, as a function of γ̂.
1.12. In one plot, graph the ATC, AVC, AFC and MC.
While traveling abroad, Carolina spends all the money in her purse to buy bowls of udon and pieces of sushi. A bowl of udon costs 120 yen whereas a single piece of sushi is 30 yen.
Category: Economics
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(Answered) 1. A logging operation needs 4 worker-hours (L) per 2 crane-hours (K) to move one batch of a…
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(Answered) (i)There aresingle-person households in the data set.(ii) Use OLS to estimate the following model:…
(i) There are single-person households in the data set.
(ii) Use OLS to estimate the following model: nettfa = β0 + β1 inc + β2 age + u. The estimated equation is: nettfaˆ = β0 + β1 inc + β2 age. The slope coefficient on inc indicates that one more dollar in annual family income (holding age fixed) results in approximately a in predicted net financial wealth. The slope coefficient on age indicates that one less year of age (holding inc fixed) results in a in predicted net financial wealth.
(iii) The intercept gives the predicted net financial wealth when the predictors (annual family income and the age of the survey respondent) are greater than 0. True False
The intercept is not meaningful because several people in the sample have annual family incomes of $0 or are 0 years of age. True False
(iv) Use the test for H0: β2 = 1 against H1: β2 < 1 to answer the following questions. The t statistic is . The p-value is . At the 1% significance level, you H0H0. (v) The correlation between annual family income and age of the survey respondent in the sample of single-person households is approximately . Use OLS to estimate the following model: nettfa = β0 + β1 inc + u. The estimated equation is: nettfaˆ = β0 + β1 inc. Which of the following best explains why the slope estimate associated with annual family income in the multiple regression (nettfa = β0 + β1 inc + β2 age + u) is not much different from the slope estimate found in the simple regression (nettfa = β0 + β1 inc + u)? The partial effect of age on nettfaˆ is negative in the sample. The correlation between inc and age in a single-person household is insignificant. The partial effect of age on nettfaˆ is positive in the sample. The correlation between inc and age in a single-person household is significant. -
(Answered) i)There aresingle-person households in the data set.(ii) Use OLS to estimate the following model:…
There are single-person households in the data set.
Use OLS to estimate the following model: nettfa = β0 + β1 inc + β2 age + u. The estimated equation is: nettfaˆ = β̂0 + β̂1 inc + β̂2 age. The slope coefficient on inc indicates that one more dollar in annual family income (holding age fixed) results in approximately a in predicted net financial wealth. The slope coefficient on age indicates that one less year of age (holding inc fixed) results in a in predicted net financial wealth.
The intercept gives the predicted net financial wealth when the predictors (annual family income and the age of the survey respondent) are greater than 0. TrueFalse The intercept is not meaningful because several people in the sample have annual family incomes of $0 or are 0 years of age. TrueFalse
Use the test for H0: β2 = 1 against H1: β2 < 1 to answer the following questions. The t statistic is . The p-value is . At the 1% significance level, you H0. The correlation between annual family income and age of the survey respondent in the sample of single-person households is approximately . Use OLS to estimate the following model: nettfa = β0 + β1 inc + u. The estimated equation is: nettfaˆ = β̂0 + β̂1 inc. Which of the following best explains why the slope estimate associated with annual family income in the multiple regression (nettfa = β0 + β1 inc + β2 age + u) is not much different from the slope estimate found in the simple regression (nettfa = β0 + β1 inc + u)? The partial effect of age on nettfaˆ is negative in the sample. The correlation between inc and age in a single-person household is insignificant. The partial effect of age on nettfaˆ is positive in the sample. The correlation between inc and age in a single-person household is significant. -
(Answered) Suppose that two firms, Hatte Latte and Bean Bruuer, are the only sellers of espresso in some…
Suppose that two firms, Hatte Latte and Bean Bruuer, are the only sellers of espresso in some hypothetical market. The following payoff matrix gives the profit (in millions of dollars) earned by each company depending on whether or not it chooses to advertise:
Bean Bruuer: Advertise
Bean Bruuer: Doesn’t Advertise
Hatte Latte: Advertise
10, 10
18, 2
Hatte Latte: Doesn’t Advertise
2, 18
11, 11
For example, the lower left cell of the matrix shows that if Bean Bruuer advertises and Hatte Latte does not advertise, Bean Bruuer will make a profit of $18 million, and Hatte Latte will make a profit of $2 million. Assume this is a simultaneous game and that Hatte Latte and Bean Bruuer are both profit-maximizing firms.
If Hatte Latte chooses to advertise, it will earn a profit ofmillion if Bean Bruuer advertises and a profit ofmillion if Bean Bruuer does not advertise.
If Hatte Latte chooses not to advertise, it will earn a profit ofmillion if Bean Bruuer advertises and a profit ofmillion if Bean Bruuer does not advertise.
If Bean Bruuer advertises, Hatte Latte makes a higher profit if it chooses .
If Bean Bruuer doesn’t advertise, Hatte Latte makes a higher profit if it chooses .
Suppose that both firms start off by deciding not to advertise. If the firms act independently, what strategies will they end up choosing?
Both firms will choose to advertise.
Hatte Latte will choose to advertise and Bean Bruuer will choose not to advertise.
Hatte Latte will choose not to advertise and Bean Bruuer will choose to advertise.
Both firms will choose not to advertise.
Again, suppose that both firms start off not advertising. If the firms decide to collude, what strategies will they end up choosing?
Both firms will choose to advertise.
Both firms will choose not to advertise.
Hatte Latte will choose to advertise and Bean Bruuer will choose not to advertise.
Hatte Latte will choose not to advertise and Bean Bruuer will choose to advertise. -
(Answered) TRUE or FALSE. Evaluate each statement as True or False.[3] The efficient set of possible state tax…
➤ Can an LLC be treated as an S corporation for federal tax purposes?
Yes. An LLC can elect S-corporation status if it meets IRS eligibility rules and files Form 2553 timely. The election changes federal tax treatment (pass-through with potential payroll tax benefits) while the LLC keeps limited liability. State rules and shareholder limits can affect eligibility and filing requirements. -
(Answered) ASSIGNMENT QUESTIONS:SECTION 1:the aggregate demand of flue relatedQuestion 1 medicines during the…
ASSIGNMENT QUESTIONS:
SECTION 1
the aggregate demand of flue relatedQuestion 1 medicines during the Covid-19 period caused a rise in their prices.
1.2 Kellogg’s sells cornflakes at R50 for a 1 kg pack. What is the effect on supply and demand if the price of milk falls?
1.3 You have been approached to be part of the SARB team responsible for putting in place measures that can combat inflation. Outline five (5) measures (10) of your advice.
1.4 SASOL is a dominant force in the chemical and energy industry in South Africa. Determine the market structure that resembles SASOL and explain how they can compete in the identified market.
1.5 With the aid of practical examples, explain the conditions under which a business is able to engage in price discrimination.
SECTION 2: CASE STUDY
CASE STUDY: South Africa – Improving productivity and the efficiency of public spending to bolster living standardsBy Falilou Fall, OECD Economics Department, August 25, 2022South Africa needs bold structural reforms to lift economic growth. The coronavirus crisis, flooding in Kwa-Zulu Natal and widespread electricity cuts have weakened an already fragile economy (Figure 1). GDP growth is projected to slow to 1.8% and 1.3% in 2022 and 2023, respectively. The war in Ukraine is creating additional risks: on the one hand, rising commodity prices are prolonging the commodity boom cycle, but, on the other hand, higher inflation is denting purchasing power. The social distress relief grant, put in place during the pandemic and covering up to 10.5 million individuals, has helped mitigate the effects of the crisis and inflation on poverty, but may not be sufficient if the economy does not grow faster: unemployment stood at 34.5% in the first quarter of 2022. The repo rate changes continue to affect the economy in different ways.Figure 1. Electricity availability has fallen dramaticallyYearly hours of load shedding by stages and total annual supply in TWh. -
(Answered) When a country has a comparative advantage in the production of a good, it means that it can…
When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade in for other goods. The following graphs show the production possibilities frontiers (PPFs) for Shenandoah and Rainiec. Both countries produce almonds and pistachios, each initially (i.e., before specialization and trade) producing 6 million pounds of almonds and 3 million pounds of pistachios, as indicated by the grey stars marked with the letter A.
Shenandoah has a comparative advantage in the production of ◻ , while Rainier has a comparative advantage in the production of ◻ – Suppose that Shenandoah and Rainier specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of ◻ million pounds of almonds and ◻ million pounds of pistachios.
Suppose that Shenandoah and Rainier agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 6 million pounds of almonds for 6 million pounds of pistachios. This ratio of goods is known as the price of trade between Shenandoah and Rainier.
The following graph shows the same PPF for Shenandoah as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Shenandoah’s consumption after trade. Note: Dashed drop lines will automatically extend to both axes.
Consumption After Trade
True or False: Without engaging in international trade, Shenandoah and Rainier would have been able to consume at the after-trade consumption bundles. (Mint: Base this question on the answers you previously entered on this page.)
True
False -
(Answered) Gold and precious metals have traditionally been considered a hedge against inflation. If this is…
Gold and precious metals have traditionally been considered a hedge against inflation. If this is true, we would expect that a fund made up of precious metals (gold, silver, platinum, and others) would have a strong positive relationship with the inflation rate. To see whether this is true, a statistics practitioner collected the monthly CPI and the monthly precious metal subindex, which is based on the prices of gold, silver, platinum, and so on for the years 1982 to 1983. These figures were used to calculate the monthly inflation rate and the monthly return on the precious metals subindex. Use a graphical technique to determine the nature of the relationship between the inflation rate and the return on the subindex. What does the graph tell you?
Year
Month
CRB Interest Rates Index
CRB Commodities Index
1982
5
79,65
103,99
1982
6
77,52
100,31
1982
7
79,43
100,17
1982
8
82,37
99,13
1982
9
85,23
97,68
1982
10
89,08
96,17
1982
11
88,16
99
1982
12
89,15
102,71
1983
1
87,31
99,42
1983
2
90,06
99,02
1983
3
88,8
98,92
1983
4
90,78
99,77
1983
5
87,9
99,01
1983
6
87,49
98,59
1983
7
83,96
96,74
1983
8
83,77
95,84
1983
9
86,17
97,58
1983
10
84,63
97,09
1983
11
85,24
96,32
1983
12
84,09
96,51 -
(Answered) What is the midpoint method for calculating price elasticity of demand? Part 2The midpoint method…
What is the midpoint method for calculating price elasticity of demand?
Part 2 The midpoint method for calculating price elasticity of demand is:
Part 3
the change in quantity divided by the average of the initial and final quantities divided by the change in price divided by the average of the initial and final prices.
the change in quantity divided by the initial quantity divided by the change in price divided by the initial price.
the average of the initial and final quantities divided by the average of the initial and final prices.
the change in quantity divided by the average of the initial and final quantities divided by price.
the change in quantity divided by the average of the initial and final quantities divided by the change in price divided by the initial price.
Part 4 How else can you calculate the price elasticity of demand?
Part 5
Price elasticity of demand can be calculated using final values for price and quantity.
Price elasticity of demand can be calculated using initial values for price and quantity.
Price elasticity of demand can be calculated by finding the slope of the demand curve.
Both a and b.
All of the above.
Part 6 What is the advantage of the midpoint method?
Part 7
The midpoint formula will give the same value whether moving from the higher price to the lower price or from the lower price to the higher price.
The midpoint formula will give the same value as the price elasticity of demand when using the higher price and the higher quantity.
The midpoint formula is easier to calculate.
The midpoint formula will give the same value as the price elasticity of demand when using the higher price and the lower quantity.
The midpoint formula will give the same value as the price elasticity of demand when using the final price and the final quantity. -
(Answered) matrix shows the profit (in millions of dollars) each company will earn depending on whether or not…
matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises:
Beantown Advertise Doesn’t Advertise
Expresso Advertise 10, 10 18, 2
Doesn’t Advertise 2, 18 11, 11
Payoff matrix (Expresso payoff, Beantown payoff)
Beantown: Advertise
Beantown: Doesn’t Advertise
Expresso: Advertise
10, 10
18, 2
Expresso: Doesn’t Advertise
2, 18
11, 11
For example, the upper right cell shows that if Expresso advertises and Beantown doesn’t advertise, Expresso will make a profit of $18 million, and Beantown will make a profit of $2 million. Assume this is a simultaneous game and that Expresso and Beantown are both profit-maximizing firms.
If Expresso decides to advertise, it will earn a profit ofmillion if Beantown advertises and a profit ofmillion if Beantown does not advertise.
If Expresso decides not to advertise, it will earn a profit ofmillion if Beantown advertises and a profit ofmillion if Beantown does not advertise.
If Beantown advertises, Expresso makes a higher profit if it choosesnot to advertise .
If Beantown doesn’t advertise, Expresso makes a higher profit if it choosesto advertise .
Suppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing?
Both firms will choose not to advertise.
Both firms will choose to advertise.
Expresso will choose to advertise and Beantown will choose not to advertise.
Expresso will choose not to advertise and Beantown will choose to advertise.
Again, suppose that both firms start off not advertising. If the firms decide to collude, what strategies will they end up choosing?
Expresso will choose to advertise and Beantown will choose not to advertise.
Both firms will choose not to advertise.
Expresso will choose not to advertise and Beantown will choose to advertise.
Both firms will choose to advertise.
It might be easier for Expresso and Beantown to achieve the cooperative outcome of the game if:
The payoffs of the game were doubled
The game had repeated trials
The payoffs of the game were cut in half
It were difficult to monitor whether the other player was advertising