Complements

1. Caviar and champagne are complements. Recently pollution has been a problem in the Volga River, where much of the world’s caviar originates. The sturgeon that live in these waters are laying fewer eggs than before. Show graphically and explain the effects on the market for caviar and the market for champagne. 2. Apple and oranges are substitutes. A freeze in Florida destroys most of the orange crop. What would you expect to happen to the market for the following: • Oranges? • Apples? • Orange Juice? 3. The federal government recently decided to raise the excise tax on hard liquor. a. Graphically illustrate the effects of this tax on the market for hard liquor. b. Would a $1... click for more

Interpreting regression results

I have a few different regression results, and need some help interpreting them. On a few, I put some of my answers to the questions in brackets - I'd like to know if I am correct, if not, some assistance would be appreciated. The results are as follows A. PSoda Hat = .956 + .1149882 PrBlack + 1.60 income Where: P Soda is the price of soda Pr Black is the proportion of the population that is black Hat = an estimated value ---- How do we interpret the coefficient on PrBlack? {I interpreted it as a 1% increase in the proportion of black population increases the price of soda by 11.49%} -- How does this estimate in A compare to the output: PSoda Hat = 1.037 + 0.6492 ... click for more

Resolve problems using Lagrangian Multiplier

Please show steps to resolve these problems please use Lagrangian Multiplier if possible. 1. A manufacturer has the following production function: Q=100 K^. 2 L^. 9 If the price per unit of labor is $20 and the price per unit of capital is $10, a) What is the optimal combination of labor and capital to use in order to maximize output for a total cost of $2,200? b) How much output will be produced? c) What is the equation for the expansion path? d) What is the meaning and value of λ (lambda)? e) What is the value of the marginal rate of technical substitution for labor and capital at the optimal point? f) Is there diminishing marginal productivity for labor and capi... click for more

Multiple Regression Hypothesis Testing

The attached problem has three parameters and gives sum-of-squared deviation data. I can't find anything like this in a textbook. I need some help in determining how to solve it. See attached file for full problem description.

Marginal product vs maximizing output

Kraft has a plant in the Alaska and Hawaii: The wage in Alaska is $5. The wage in the Hawaii is $20. Marginal product of the last worker in Alaska is 100 Marginal product of the last worker in the Hawaii. is 500 (Size of the plants or the amount of capital equipment is unchangeable). a. Is the firm maximizing output relative to its labor cost? Details. b. If it is not, what should the firm do?