Economics Homework, accounting homework help

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Economics

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There are 2 parts , the first part has 5 multiple choice questions, the second part 2 story problems.

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Please submit as a word document (preferred) or a pdf. No jpeg files will be accepted. PAT 1: Multiple Choice Questions. Circle or highlight the one best answer. . 1. If a regression analysis of rent and square footage of the apartments produces an R2 of .46 and an estimated coefficient for square footage of +1.2 with a T statistic of 4.56, the following interpretation can be made: a. This regression is able to explain the rent of the apartment 46% of the time and an increase in size of the apartment by one square foot will increase rents by $1.20, but we cannot reject the null hypothesis that the coefficient is equal to zero. b. This regression is statistically insignificant and unreliable because the R2 is only.45 and it must be .95 to be statistically significant at the 95% confidence interval. c. This regression is able to explain about 46% of the variation of the rents with the independent variable of square footage, increases in size of the apartment by one square foot will increase rents by $1.20, the T statistic indicates that we can reject the null hypothesis and thus are confident that this variable is statistically significant in explaining the level of rents. d. This regression indicates that rent and square footage of the apartment is only 46% of the reason that people rent a particular apartment. The square footage coefficient indicates that renters are willing to pay $120 more for an apartment with an additional 10 square feet. The T statistic indicates that 4.56 times out of ten this relationship will be statistically significant. e. One would need to know more about this regression and its output before one could draw any conclusions about the relationship between rent and square footage. 2. Suppose a manager at McDonalds was making $45,000 per year but gave up his job in order to start his own hamburger joint. He withdraws $60,000 from his retirement account the was earning 7% per year. If his revenue from the venture is $170,000 and his cost of goods sold and other yearly expenses are $110,000, then his economic profit is A. $10,800 B. $15,000 C. $60,000 D. 0 E. -$45,000 3.Which of the following correctly describes the relationship between the marginal product and the average product curves? A. MP is everywhere above AP. B. AP is everywhere above MP. C. MP crosses AP at the AP’s maximum point. D. AP crosses MP at the MP’s maximum point E. both AP and MP first fall and then rise. . 4. In a high tech industry with constant opportunities for technological innovation and product improvement that has medium to low barriers to entry, fairly low minimum efficient size of the plant relative to the market and high profit margins, the best pricing strategy might be f. g. h. i. j. Limit pricing Predatory pricing Cream skimming Price discrimination. Mark-up pricing. 5. Third Degree price discrimination requires k. That consumers with different price elasticities can be segregated into separate groups. l. That there is no ability for customers to resell the lower priced products to the high priced customers. m. That the firm has some degree of market power that allows it to charge about its production costs. n. All of the above. o. None of the above, because all forms of price discrimination have been outlawed by the Robinson Patman Act of 1936. PART 2 1. You are to analyze the photovoltaic (PV) solar panel market and determine what will happen to the equilibrium price and quantity in the Utah market. PV panels can be place on top of south facing residential or commercial buildings to generate electricity for the home or the business. Currently, the residents can sell back the electricity to Rocky Mountain Power for the full retail price of electricity. In essence, the residents’ electricity meters run backwards when they generate more electricity than is used in the home. This is known as net metering. Rocky Mountain Power is requesting the approval for a new tariff for customers that produce PV power. This new tariff or pricing policy will increase the monthly costs to PV customers by approximately $30 to $50 per month. The Company argues that these customers are not paying the full cost to maintain the electrical grid. On another front, the Chinese manufacturers of PV panels have excess manufacturing capacity and in order to lower their average total costs they have decided to increase total output of PV panels. Assume that Utah PV installers purchase their panels on the world market. Given these two events, determine the likely outcome for the PV market in Utah in terms of equilibrium price and quantity of PV panels. Which variable price or quantity do you know the direction of change with certainty, which variable are you uncertain about? Draw one supply and demand graph to illustrate your conclusions. 2. The minimum efficient size of the firm for lithium ion batteries is approximately 500,000 batteries per year with a yearly market demand of 40 million batteries. There are relatively low barriers to entry for this industry and consumers generally perceive these products to be homogeneous. What is the maximum number of firms that could meet the minimum efficient size? How would you categorize the industry in terms of its market structure? Explain why you characterized this industry this way. (Give at least two or three reasons.) What do you expect will be the long term prospects for profits for firms within this industry? Draw a graph using the long run average costs curve to illustrate this market along with the attendant demand curve. a. Next assume that with the entrance of Elon Musk’s lithium ion battery’s Gigafactory with a new more efficient manufacturing technology that takes advantage of tremendous economies of scale, the minimum efficient size of the firm is now 25 million batteries per year. Assume that demand will grow by 25%. How will this new technology change the structure of the industry? How do you expect the industry structure to evolve? Given your conclusions, discuss at least two pricing strategies that Elon Musk could employ to maximize long term profits. Provide your reasoning for choosing these pricing strategies. Reassess the prospects for firms within the industry for 2016. Again draw a long run average cost curve for this new market with the attendant demand curve
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Explanation & Answer

Hi there!Attached please find a Word document containing the complete solution to the 5 MC and both short-answer questions (with graphs and answers in full).Thanks again!Selenica

Please submit as a word document (preferred) or a pdf. No jpeg files will be accepted.
PAT 1: Multiple Choice Questions. Circle or highlight the one best answer.
.
1. If a regression analysis of rent and square footage of the apartments produces an R2 of .46 and
an estimated coefficient for square footage of +1.2 with a T statistic of 4.56, the following
interpretation can be made:
a. This regression is able to explain the rent of the apartment 46% of the time and an
increase in size of the apartment by one square foot will increase rents by $1.20, but we
cannot reject the null hypothesis that the coefficient is equal to zero.
b. This regression is statistically insignificant and unreliable because the R2 is only.45 and
it must be .95 to be statistically significant at the 95% confidence interval.
c. This regression is able to explain about 46% of the variation of the rents with the
independent variable of square footage, increases in size of the apartment by one square
foot will increase rents by $1.20, the T statistic indicates that we can reject the null
hypothesis and thus are confident that this variable is statistically significant in
explaining the level of rents.
d. This regression indicates that rent and square footage of the apartment is only 46% of
the reason that people rent a particular apartment. The square footage coefficient
indicates that renters are willing to pay $120 more for an apartment with an additional
10 square feet. The T statistic indicates that 4.56 times out of ten this relationship will
be statistically significant.
e. One would need to know more about this regression and its output before one could
draw any conclusions about the relationship between rent and square footage.
2. Suppose a manager at McDonalds was making $45,000 per year but gave up his job in order to start
his own hamburger joint. He withdraws $60,000 from his retirement accou...


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