MANAGERIAL ECONOMICS QUESTIONS

CH 20-4 According to a (hypothetical) government report, the United States can produce three computers or 3,000 cases of win with one unit of resources, while Germany can produce one computer or 5,000 cases of whine with one unit of resources. a. If this report is accurate, will specialization increase the world output of computers and wine? b. if the maximum number of computer that can be produced per year in the united states is 1,000, draw the U.S production possibilities curve on a graph. c. In the diagram, draw the trading possibilities curve if the United States produced only computers and trades them for German whine (at a price for each computer equivalent to 2,000 cases of Germa... click for more

Managerial Economics - FTC vs. Staples

1) What were the alternative methods used by the FTC and the merging firms to determine whether or not an Office Depot and a Staples outlet were in the same geographical market? 2) How did this differentiation in geographical market measurement affect the pricing behavior estimated by the FTC and by the merging firms? What is the economic term we commonly use for "price sensitive" as used in the paper? 3) Which of the two studies do you find more compelling? Would you allow the merger? Has your company been involved in a similar court injunction (if no, choose a similar example outside your firm)? Identify the case and how it is similar. See attached file for full problem descrip... click for more

Hypothesis testing and regression

The following equation was estimated for the fall and second semester students: (See attached) Here, trmgpa is term GPA, crsgpa is a weighted average of overall GPA in courses taken, cumgpa is GPA prior to current semester, tothrs is total credit hours prior to the semester, sat is SAT score, hsperc is graduating percentile in high school class, female is a gender dummy, and season is a dummy variable equal to unity if the student’s sport is in season during the fall. The usual and heteroskedasticity-robust standard errors are reported in parentheses and brackets, respectively. (i) Do the variables crsgpa, cumgpa and tothrs have the expected estimated effects? Which of these variabl... click for more

Regression heteroskedasticity

Multiplying an estimating equation by a correcting factor to correct heteroskedasticity may cause extra correlation to enter the model, which raises the R^2. This renders our ultimate regression results meaningless. True or false, or uncertain? Please provide an explanation.

Econometrics Multiple Choice

If the interest rate is 10% and cash flows are $1,000 at the end of year 1 and $2,000 at the end of year 2, then the present value of these cash flows is A. $2,562 B. $3,200 C. $ 439 D. $3,000 2. Economic profits are: A. Total revenue minus total cost B. Marginal revenue minus marginal cost C. Total revenue minus total opportunity cost D. Total profits of the economy as a whole 3. A farm must decide whether or not to purchase a new tractor. The tractor will reduce costs by $2,000 in the first year, $2,500 in the second, and $3,000 in the third and final year of usefulness. The tractor costs $9,000 today, while the above cost savings will be realized at the end of ... click for more