Assignment
CHAPTER 1
I. The following cross-price elasticities have been estimated for some goods in the U.S.:
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Cross-Price Elasticity
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Transportation and outdoor recreation
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-0.05
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Food and outdoor recreation
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0.15
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Clothing and food
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-0.18
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You are the owner of a small rural grocery store. You recently read in the Wall Street Journal that the price of recreation is expected to increase by 15 percent. How would you expect your store's sales of food products change (show your work)? What is the relationship between food and recreation?
II. You are the are the manager of a small meat processing plant. Your research department estimates that the income elasticity of demand for grain fed beef is -1.94. You recently read in the Wall Street Journalthat the recession will end soon, and consumer incomes are projected to rise by 10 percent over the next 3 years. How will this forecast affect your purchases of grain fed cattle? What type of good is grain fed beef?
III. Think about the concept of elasticity how it could be applied more generally. Define the own advertising elasticity of demand for a product (X) and discuss what that would measure. Define cross-advertising elasticity of demand between good X and Y and discuss what that would measure. What sign (positive or negative) would you expect these elasticities to have? How would you decide if a good were advertising elastic or inelastic?
IV. Refer to the reading assignment, With Gas Prices Less of a Worry, Buyers Pass Hybrid Cars By," The New York Times, May 14, 2015, and answer the following questions.
What factors do buyers consider when purchasing a new car?
Why has demand for hybrid automobiles fallen in recent years?
List two goods for which lower gasoline prices will reduce demand, and two goods for which lower gasoline prices will increase demand.
CHAPTER 2
I. A firm produces 500 units per week. It hires 20 full-time workers (40 hours/week) at an hourly wage of $15. Raw materials are ordered weekly and they cost $10 for every unit produced. The weekly cost of the rent payment for the factory is $2,250. What is the breakdown of fixed, variable, and total costs? Explain.
II. Total costs increase from $1500 to $1800 when a firm increases output from 40 to 50 units. How much are fixed costs? Explain.
III. You run a game day shuttle service for parking services for the local ball club. Your costs for different numbers of customer are 1: $30, 2: $32, 3: $35, 4: $38, 5: $42, 6: $48, 7: $57, and 8: $68. What are your marginal costs for each customer? If you can charge $10 per ride, how many customers would you want? Explain.
IV. A copy company wants to expand production. It currently has 20 workers who share eight copiers. Two months ago, the firm added two copiers, and output increased by 100,000 pages per day. One month ago, they added five workers, and productivity increased by 50,000 pages per day. Copiers cost about twice as much as workers. Would you recommend they hire another employee or buy another copier? Explain.
CHAPTER 3
1. What is the problem statement in this paper?
2. What are the purposes of the study?
3. Describe the sample used for this study. What is the total sample size?
4. What are some of the findings? (Give three examples)
5. What are the limitations of the study the researcher acknowledged? (Give two examples)
6. What is a limitation of the study the researcher did not acknowledge?
Attachment:- Global-Financial-Crisis-on-Primary-Schools.pdf