Economics of Enterprise Answers

Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity?

YI = β 1X I 1 + β 2X I 2 + UI

WhereUi ∼ NID (0, σu2 ) , YI is observable random variable and theXij ' s , j =1, 2

are observable non-random (non-stochastic) variables.

The data that follows is based on a sample of size N = 120 and gives the

sums of squares and cross-products of the indicated variables

Y X1 X2Y 39 6 2X1 6 4 0X2 2 0 4

a). Compute the best linear unbiased estimates of the coefficients. (2 points)b). Give a 95% confidence interval for β1 . (2 points)Test the hypothesis H 0 : β1 + β2 = 1 against the alternative H 0: β1 + β2 ≠ 1

at the 95%confidence level.

a) A farmer sells cabbages for N$10 per head. The farmer’s variable costs are N$2.50 per head and total cost of 100 heads is N$1450. i. How many cabbages must the manufacturer produce each month to break even? (6) ii. How man cabbages should be produced to make profit (4) b) Total cost of producing carrots is C(x) = 3600+100x+2x2 and the total revenue function R(x) =500x-2x2 i. Find the number of kg that maximizes profit (6) ii. Find maximum profit

A jaw crusher, with a closed setting of 3 in., produces 200 tph of crushed stone. Determine the number f 

1. The value of manufactured goods (things made in factories and plants) produced each year in the United States has more than doubled over the last 30 years. Also over the last 30 years the number of Americans employed in manufacturing has significantly decreased. What does this tell you about the productivity of workers in the manufacturing industry?