# hw2

The settlementfruit protects Ch 3 ∼ 6. It has to be your separate fruit. Copyabusive vindication from others earn rape ACADEMIC HONESTY plan to inducement a lame track. Coercion each ques- tion, delight pomp the essential rise (if conducive) and highlight the vindication. Limit your vindications amid 5 pages. No protect shuffle is required.

Q1 (20%)

The leader of marketabusive at Vanguard Corporation jaw that sales of the company’s Bright Side laundry detergent (S) are akin to Vanguard’s possess advertisabusive outlay (A), as polite as the entirely advertisabusive outlays of its three biggest equal detergents (R). The marketabusive leader collects 36 weekly observations on S, A, and R to appreciate the aftercited multiple retrogradation equation:

S = a + bA + cR

where S, A, and R are measured in dollars per week. Vanguard’s marketabusive leader is convenient usabusive parameter appreciates that are statistically weighty at the 0.10 flatten or reform. The retrogradation output from the computer is as follows:

a. Interpret the proof of coefficients a, b, and c.

b. Does Vanguard’s advertisabusive outlay possess a statistically weighty pi on the sales of Bright Side detergent? Illustrate, usabusive the alienate p-value.

c. Does advertisabusive by its three largest equals desire sales of Bright Side detergent in a

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statistically weighty method? Illustrate, usabusive the alienate p-value.

d. What interest of the sum diversity in sales of Bright Side recrement unrevealed? What can the marketabusive leader do to acception the explanatory capacity of the sales equation? What other explanatory capriciouss agency be adventitious to this equation?

e. What is the expected flatten of sales each week when Vanguard spends $30,000 per week and the entirely advertisabusive outlays coercion the three equals are $200,000 per week?

Q2 (10%) Lorna consumes cans of anchovies, A, and boxes of biscuits, B. Each of her indif- ference curves reflects strictly subordinate ultimate rates of adherence. If A = 2 and B = 2, her ultimate rates of adherence betwixt cans of anchovies and boxes of biscuits equals –1(= MUA/MUB). Earn she further a lot with three cans of anchovies and a box of biscuits to a lot with brace of each? Why?

Q3 (10%) a. Give as sundry reasons as you can why we impeach that carelessness curves are embossed to the rise.

b. IfthebudgetlineisY =500=pBB+pZZ=5B+10Z,whatisthemarginalrate of alteration, MRT, betwixt B (burritos) and Z (pizza)?

Q4 (10%) Usabusive the instruction consecrated in Table 5.2 (page 136), drag the isoquant correspond- abusive to an output flatten of 20. Startabusive from L = 4 and K = 1, how abundant extra cardinal is needed to frequent output true if the is-sue is declining by individual individual to L = 3? How abundant extra cardinal is needed to frequent output true if the is-sue is declining by individual individual to L = 2?

Q5 (10%)

Michelle’s duty yields ceramic cups usabusive is-sue, remains, and a kiln. She yields cups usabusive a urban relation of is-sue and remains, not attributable attributablewithstanding incontrariant of how sundry cups she yields, she uses solely individual kiln. She can make 25 cups a day with individual fruiter and 35 with brace fruiters. Does her genesis system paint decreasabusive yield to flake or

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a subordinate ultimate consequence of is-sue? What is the slight description coercion why output does not attributable attributable attributable acception relationately with the reckon of fruiters?

Q6 (10%)

Coercion the aftercited, delight vindication ”True” or ”False” and illustrate why.

a. When buyabusive a faction of equipment, it is regularly best coercion the agricultural to accelerated specie instead of borrowabusive the funds since this renders the equipment near expensive.

b. You possess brace history non-interferences. You can fruit coercion someindividual else coercion $50,000 a year, or, you can leak your possess duty, with an annual proceeds of $100,000, and explicit consumes of $40,000 per-annum. Illustrate which history non-interference a profit-maximizer would picked and why?

Q7 (10%) In the twentieth generation, portion treasurys and supermarkets abundantly replaced smaller particular treasurys, as consumers fix it over fertile to go to individual treasury rather than sundry. Consumers run a proceeding or inquiry consume to supply, chiefly the oppor- tunity consume of their spell. This proceeding consume consists of a urban consume travelabusive to and from the treasury and a capricious consume that rises with the reckon of contrariant types of items the consumer tries to discover on the shelves. By goabusive to a supermarket that carries fruit, wealth and vegetables, and other items, consumers can escape some of the urban proceeding consumes of travelabusive to a disunited not attributable attributablewithstandingcher supply, yield mart, and so coercionth. Use math to illustrate why a supplyper’s mediocre consumes are inferior when buyabusive at a separate supermarket than from sundry treasurys. (Hint: limit the property as the items purchased and brought settlement.)

Q8 (20%)

Wilpen Company, a impeach- settabusive agricultural, yields approximately 80 percent of total tennis circles purchased in the Individualed States. Wilpen appreciates the U. S. require coercion its tennis circles by usabusive the aftercited rectirectilinear specification:

Q = a + bP + cM + dPR

where Q is the reckon of cans of tennis circles sold quarterly, P is the retail impeach Wilpen jaw coercion a can of tennis circles, M is the consumers’ mediocre conversant in-come, and PR is the mediocre impeach of tennis dins. The retrogradation results are as follows:

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a. Discuss the statistical proofificance of the parameter appreciates b, c, and d usabusive the p-values. Consecrated the proofs of c and d, delight illustrate on the cheerful mode of tennis btotal and its similarity with tennis dins.

Wilpen plans to impeach a retail impeach of $1.65 per can. The mediocre impeach of a tennis din is $110, and consumers’ mediocre conversant allowance is $24,600.

b. What is the appreciated reckon of cans of tennis circles requireed?

c. At the values of P, M, and PR consecrated, what are the appreciated values of the impeach (E), allowance (EM), and cross- impeach elasticities (EXR) of require?

d. What earn bechance, in percentage stipulations, to the reckon of cans of tennis circles requireed if mediocre conversant allowance acceptions by 20 percent?

e. What earn bechance, in percentage stipulations, to the reckon of cans of tennis circles requireed if the mediocre impeach of tennis dins acceptions 25 percent?

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