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MARK-UP You can use; a =F - AX Question: 1 The 2008 sales and profits of seven companies were given as follows and B -

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MARK-UP You can use; a =F - AX Question: 1 The 2008 sales and profits of seven companies were given as follows and B - Z. ( - FXX - X) _ (YX. )- MEX Firm Sales ($ Profit ($ E ( x - X) Billions) Billions) Fiat 5.7 0.27 Question: 2 Honda 6.7 0. 12 (a) Most of us want to leave an exciting life i.e. life full of excitements, BP 0.2 0.01 adventures etc. but unluckily we do not always have the resources Toyota 0.6 0.04 necessary to do everything we want to do. Therefore, choices have to Apple 3.8 0.05 be made or in the words of economists; individuals have to decide "what IBM 12.5 0.46 to do and what not to do / how to allocate scarce resources in the most Phillips 0.5 0.02 effective ways". For this, a body of economic principles and concepts has been developed to explain how people and business react in this The estimated value for the company's Profit can be estimated using situation. Because of scarcity, all economic choices can be governed by the equation; the term called opportunity cost. 1) Discuss (with examples) the principle of opportunity cost as can be used in business decision making Yi = a + Bxi. Eqn. 1 (i) Why is managerial economics so vital for business managers? Where; Y = Companies Profit X = Companies Sales a and B are estimated parameters in the model (a) Calculate the sample regression line, where profit is the dependent variable (Y) and sales is the independent variable (X) (b)What does the calculated value for slope coefficient mean? (c) Estimate the 2008 average profit of a firm with 2008 sales of $2 billion NB

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