4541-econ

Subject: Long Run,Short Run,Law of dimishing Marginal return Details: Define Short Run and Long Run. Discuss three types of decisions that firm have to take in Long Run. State the Law of Diminishing Marginal Returns. Differentiate between Diminishing Returns to Factors and Diminishing Returns to Scale.

Regression

To study the relationship between capacity utilization in manufacturing and inflation in the united states, Thomas Gittings obtained the following regression results based on the annual data from 1971-1988: ^ Y(sub(t))= -70.85 + .8880X(sub (t)) t= (-5.89) (5.90) r^2= 0.685 where Y= changes in inflation as measured by the wholesale price index and X= capacity utilization rate. a. a priori, would you expect a positive relationship between Y and X? WHY? specific b.how would you interpret the slope coefficient? specifics! c. is the estimated slope coefficient statistically significant? d. is it statistically different from unity? e.the natural rate of capacity utilizat... click for more

Regression

(Y (sub (i)))= B (sub 0) + B(sub 1) X(sub i) + B(sub 2) D(sub2i) + B(sub 3) D(sub 3i) + u(sub i) where: Y= annual earnings of MBA graduates X= years of service D(sub 2)= 1 if Harvard MBA =0 otherwise D(sub3)= 1 Wharton MBA = 0 otherwise a. What are the expected signs of the various coefficients?why? b. How would you interpret B(sub 2) and B(sub 3)? why? c. If B(sub 2) > B(sub3), what conclusion would you draw and why?

functional forms of regression models

based on 11 annual observations, the following regressions were obtained: ^ Model A: Y(sub t) = 2.6911 - 0.4795X(sub t) se = (.1216) (.1140) r^2 = .6628 ^ Model B: Y(sub t) = 0.7774 - .2530 ln X(sub t) se = (.0152) (0.0494) r^2 = 0.7448 where Y = the cups of coffee consumed per person per day and X = the price of coffee, dollars per pound. a. interpret the slope coefficients in the two models. explain specifically. _ _ b. you are told that Y(mean) = 2.43 and X(mean) = 1.11. At these mean values, estimate the price elasticity for model A and show work. c. what is the price elasticity for m... click for more

mutiple regression estimation

based on the U.S data for 1965-IQ to 1983-IQ (n=76), james and adibi obtained the folowwing regression to explain personal consumption expenditure in the U.S. ^ Y = -10.96 + .93X(sub 2t) - 2.09X(sub 3t) t= (-3.33) (249.06) (-3.09) R^2 = 0.9996 F= 83,753.7 where Y = the PCE($, in billions) X(sub 2) = the disposable (i.e. after-tax) income in billions X(sub 3) = the prime rate (%) charged by banks a.what is the marginal propensity to consume(MPC)- the amount of additional consumption expenditure from an additional dollar's personal disposable income? b. is the MPC statistically different from 1? show the appropriate testing proc... click for more