ECON 2105 Study Guide - Comprehensive Midterm Guide: Washing Machine, Demand Curve, Economic Equilibrium

95 views19 pages

cyanmule96

7 Feb 2017

School

Department

Course

Professor

For unlimited access to Study Guides, a Grade+ subscription is required.

Document Summary

When variables are related this way that is, when an increase in one variable is associated with an increase in the other variable the variables are said to have a positive relationship. When an increase in one variable is associated with a decrease in the other variable, the two variables are said to have a negative relationship. The slope of a curve is a measure of how steep it is and indicates how sensitive the y-variable is to a change in the x-variable. A nonlinear curve is one in which the slope changes as you move along it. Economists often prefer to express a negative number as its absolute value, which is the value of the negative number without the minus sign. In general, we denote the absolute value of a number by two parallel bars around the number; for example, the absolute value of 4 is written as | 4| = 4.

Related Questions

ECON 3050

Q24. The coefficient of determination (r²) is calculated as 0.49, then the correlation coefficient:

Cannot be determined without the data

Should be - 0.70 or 0.70

Should be 0.

Neither of the above

Q25. A regression line is used for all of the following except one. Which one is not a valid use of a regression line?

To estimate the average value of Y at a specified value of X.

To predict the value of Y for an individual, given that individual's X-value.

To estimate the change in Y for a one-unit change in X.

To determine if a change in X causes a change in Y.

Q26. Which choice is not an appropriate description of YË in a regression equation?

Estimated response

Predicted response

Estimated average response

Observed response

Q27. Which of the following is the best way to determine whether or not there is a statistically significant linear relationship between two quantitative variables?

Compute a regression line from a sample and see if the sample slope is 0.

Compute the correlation coefficient and see if it is greater than 0.5 or less than â0.5.

Conduct a test of the null hypothesis that the population slope is 0.

Conduct a test of the null hypothesis that the population intercept is 0.

Q28. There is no relationship between variables unless the data points lie in a straight line.

True

False

Q29. The sample regression analysis

Is the same as the population regression line

Is used to estimate the population regression line

Shows the true relation between dependent and independent variables

None of the above.

Q30. In regression, a dependent variable is sometimes called a predictor variable.

True

False

Q31. In a linear regression equation of the form y = a + bx, the intercept shows

The amount that y changes when x changes by one unit

The amount that x changes when y changes by one unit

The value of y when x is zero

The value of x when y is zero.

Q32. In a linear regression equation of y = a + bx, the slope b shows

Y / b

X / b

Y / X

X / Y

yellowturtle964

Mulberry Realty sells homes in the northeast section of the United States. A frequently asked question by prospective buyers is: If we buy this house, how much can we expect to pay to heat it during the winter? The research division of Mulberry is asked to develop some guidelines for heating costs (Cost) (measured in $) for single family homes. The division decides three variables are related to heating costs: (1) the mean daily outside temperature (Temp) (in degrees Fahrenheit); (2) the number of inches of attic insulation (Insulation); and (3) the age of the furnace in the house (Age) (measured in years). The division collected data during the month of January for a sample of homes. Parentheses contain the variable names (in bold) as listed in the data set.

The data set for this scenario is included in an Excel file.

a. Is the information used in this analysis, cross-sectional data or time series data? (4 pts)

b. State your a priori hypothesis about the sign of the slope for each independent variable. (3 pts each)

c. Write out the estimated regression equation using variable specific names? (5 pts)

d. Interpret the slope coefficient for the variable with the largest slope coefficient. (5 pts)

e. For the slope coefficient with the smallest value (in absolute value), test to see if it has the directional relationship hypothesized in part (b). Alpha = 0.05. (15 pts)

Data Set:

Cost ($)	Temp (deg)	Insulation (ins.)	Age (yrs)
250	35	3	6
360	29	4	10
165	36	7	3
43	60	6	9
92	65	5	6
200	30	5	5
355	10	6	7
290	7	10	10
230	21	9	11
120	55	2	5
73	54	12	4
205	48	5	1
400	20	5	15
320	39	4	7
72	60	8	6
272	20	5	8
94	58	7	3
190	40	8	11
235	27	9	8
139	30	7	5

mauveox554

Question:

Is it true that in a short-run production process, the marginal cost curve eventually slopes upward because firms have to pay workers a higher wage rate as they produce more output? Explain your answer.

Answer:

The marginal product of labor is the increase in output resulting from a one-unit increase in the amount of labor employed. In my own opinion, the statement can be true in the sense that, as the firm produces more and more the cost of production has to come down first; that becomes constant or minimum and then starts to increase. The marginal cost is also a U-shaped curve that first falls then reaches a minimum and starts rising. The reason for rising marginal costs in the short term will only be an increase in the wages as the only factor which is variable in the short-run is labor whereas all factors are kept fixed, so the fixed costs will keep coming down. If you increase labor, you are going to suffer from diminishing marginal returns. And in the long-run, one will suffer diminishing returns from both input factors, labor, and capital.

The short-run cost relationship between the marginal product of labor and the marginal cost, the labor is variable. We have already established that there are diminishing marginal returns because the labor decreases. To increase output in the short-run, a firm must increase the amount used of a variable input. The marginal product reduces, not because consecutive workers are lesser, but because more workers are being used relative to the amount of equipment that is available, what they have left to work with. An example; if a clinic has only one dentist on duty and several assistants are available and we have a lot of patients waiting to see that doctor, the number of patients served by this office cannot increase without limit. The excess assistants will not be able to increase the number of patients in the office, not because they are not reliable or good enough, but because they cannot perform the doctor's job, and there is only one doctor in the office.

https://www.quora.com/Why-does-the-marginal-cost-curve-slope-upwards

I need a peer reply for this.

amethystwhale496

ECON 2105 Study Guide - Comprehensive Midterm Guide: Washing Machine, Demand Curve, Economic Equilibrium

Document Summary

Get access

Related Documents

ECON 2105 Chapter Notes - Chapter 2: Washing Machine, Absolute Advantage, Negative Number

ECON 1100 Chapter Notes - Chapter 2- Appendix : Scatter Plot, Negative Number

ECON 105 Lecture Notes - Lecture 2: Scatter Plot, Demand Curve, Economic Equilibrium

Related Questions