Please show ex[lanation for your choice of mutiple choice.

1.Suppose the market for rental cars has two segments, business travelers and vacation travelers. The demand curve for rental cars by business travelers is Q_b = 35 0.25P, where Q_b is the quantity demanded by business travelers (in thousands of cars) when the rental price is P dollars per day. No business customers will rent cars if the price exceeds $140 per day. The demand curve for rental cars by vacation travelers is Q_v = 120 1.5P, where Q_v is the quantity demanded by vacation travelers (in thousands of cars) when the rental price is P dollars per day. No vacation customers will rent cars if the price exceeds $80 per day.

A)Derive and draw the market demand curve for rental cars.

B)If the price of a rental car is $60, what is the consumer surplus in each market segment?

2.Sherwin-Williams Company is attempting to develop a demand model for its line of exterior house paints. The company's chief economist feels that the most important variables affecting paint sales (y) (measured in thousand gallons) are

• Promotional expenditure (a) (measured in thousand dollars)
• Selling price (p) (measured in dollars per gallon)
• Disposable income per household (m) (measured in thousand dollars).

Using the variables specified by the Company's chief economist, the Research Department obtained from a data set of thirty observations the following estimation result of a log-linear regression model given by .

--------------------------------------------------------------------------------------------------

|CoefficientStd. Err.tP>|t|[95% Conf. Interval]

--------------------------------------------------------------------------------------------------

|-.0232291.1420415-0.160.875-.3707923.324334

|-1.037375.3655166-2.840.030-1.931762-.1429884

|.3882373.37533801.030.341-.53018161.306656

constant |6.9518671.4428534.820.0033.42133310.4824

First conduct an appropriate t-test for each independent variable except the constant as to whether it is statistically significant at the 95% confidence level, and then make an economic interpretation of each of the statistically significant coefficients. Use the "Students" probability distribution table for two-tailed tests posted on Blackboard.

3.The demand curve for grilled cheese sandwiches has been estimated using statistical techniques as follows:

log(Q) = -1.10 - 0.18log(P) + 1.21log(I) + 0.84log(Ph)

whereQ is the quantity of grilled cheese sandwiches

P is the price of grilled cheese sandwiches

I is income

Ph is the price of hamburgers

If P = $1,000, the price elasticity of demand:

A) is 0,

B) is negative infinity.

C) is -0.18.

D) cannot be determined without knowing I and Ph.

4.When a person consumes two goods (A and B), that person's utility is maximized when the budget is allocated such that:

A) the marginal utility of A equals the marginal utility of B.

B) the marginal utility of A times the price of A equals the marginal utility of B times the price of B

C) the ratio of total utility of A to the price of A equals the ratio of the marginal utility of B to the price of A.

D) the ratio of the marginal utility of A to the price of A equals the ratio of the marginal utility of B to the price of B.

5.Microsoft wants to calculate the effect of a worldwide 5% price cut on its sales of Excel to clients in different countries.Microsoft sells Excel at different prices in U.S., Japan and Europe.Before the price cut U.S. sales were twice sales in Japan and Europe each.If the price of elasticity of demand in the U.S., Japan and Europe are -3, -4, and -2 respectively, the worldwide sales rise by

A) 10%.

B) 15%.

C) 20%.

D) 25%.

E) none of the above

6.Suppose Jin's demand curve for text messages is T = 150 - 500P_t , where T stands for the number of text messages and P_t represents the price of text messages. The current price is $0.10 per message. If he begins to use Google Hangouts, his demand curve for text message will shift to T = 100 - 500P_t . Compute the expected change in Jin's consumer surplus assuming the text price remains the same.

7.Consider the following short-run production function (where L = variable input, Q = output):Q=6L²-0.3L³. Does output always increase with input use? If so, prove it. If not, find the maximum output possible.

8.A grocery shop is owned by Mr. Moore and has the following statement of revenues and costs:

Revenues

$250,000

Supplies

$25,000

Electricity

$6,000

Employee Salaries

$75,000

Mr. Moore's Salary

$80,000

Mr. Moore always has the option of closing down his shop and renting out the land for $100,000. Also, Mr. Moore himself has job offers at a local supermarket at a salary of $95,000. Compute Mr. Moore's economic profits, which is the difference between revenues and opportunity costs.

9.Suppose the long-run cost function is C = 2q². Economies of scale are often measured in terms of cost-output elasticity, which is the percentage change in the cost of production resulting from a 1-percent increase in output. What is the (point) cost-output elasticity for this case?

A) 1

B) 2

C) 1/2

D) 4

10.Use the following two statements to answer this question:

I.The average total cost of a given level of output is the slope of the line from the origin to the total cost curve at that level of output.

II.The marginal cost of a given level of output is the slope of the line that is tangent to the variable cost curve at that level of output.

A) Both I and II are true.

B) I is true, and II is false.

C) I is false, and II is true.

D) Both I and II are false.

11.One Guy's short-run cost function is: C(q, K) = + 0.25K, where q is the number of pizzas produced and K is the number of ovens.Currently, One Guy's is leasing 4 ovens in the short run.Calculate the average cost of producing 10 pizzas.The manager of One Guy's is considering leasing 5 additional ovens.If One Guy's adds 5 more ovens, what is the average total cost of producing 10 pizzas?

12.Bubba Burgers has discovered there are economies of scope available to the restaurant. Which is most likely to be a response to this discovery?

A) Bubba adds more varied inputs to burger production.

B) Bubba expands burger production, focusing on that one good.

C) Bubba contracts burger production.

D) Bubba adds grilled chicken sandwiches to the menu.

E) Bubba cuts back on the diversity of the menu.

13.Which of the following business combinations likely exhibit economies of scope?

A) Banking services for individuals and banking services for other business

B) Retail clothing stores and electronic (internet) clothing sales

C) Hospitals that perform heart surgery and hospitals that perform cosmetic surgery

D) all of the above

14.A cubic cost function implies:

A) linear average fixed cost curve.

B) linear marginal cost curve.

C) a U-shaped marginal cost curve.

D) all of the above

All questions are complete. For the table you can get the two tailed table from online. Tutor can just help with what he can. That's all we have. It is similation using the data we have. Nothing else was provided. Tutor can skip what he thinks is incomplete.