subject: MANAGERIAL ECONOMICS

subject: MANAGERIAL ECONOMICS

Consider estimation of a short-run average variable cost function of the form AVC = a + bQ + cQ 2

Using time-series data, the estimation procedure produces the following computer output:

DEPENDENT VARIABLE: AVC R?SQUARE F?RATIO P?VALUE ON F

OBSERVATIONS:22 0.8557 56.32 0.0001

VARIABLE PARAMETER ESTIMATE STANDARD ERROR T?RATIO / P?VALUE

INTERCEPT 75.0 26.5 xxxx / xxxx

Q ?0.0120 0.0058 xxxx / xxxx

Q2 0.00006 0.000013 xxxx / xxxx

a) Of the three parameter estimates a , b, and c ? , test the estimates that are statistically significant at the 5 percent level. [Hint: please refer to Appendix for a t-values table]

b) Calculate the levels of output and average variable cost when the average variable cost reaches its minimum level.

c) What is the estimated marginal cost function?

d) What is the estimated average variable cost function?

e) Calculate marginal cost and average variable cost when output is 6,000 units.

X ECON5501 - Questions Final Exam 2020-09 (1).pdf - Adobe Acrobat Reader DC X File Edit View Window Help ? Sign In Home Tools Document 14 6 /6 9 0 Appendix A TABLE A.2 t Distribution: Critical Values of t Significance level Degrees of Two-failed test. 10% 5% 2% 0.2% 0.1% freedom One-tailed rest: 50% 2 504 0.5% 0.1% 0.05% 6.314 12.70 31.821 63 657 318.309 636.619 2.920 4.303 6.965 9.925 22.327 31 599 2 353 3.182 4.541 5.841 10.215 12 924 2132 2.776 3.747 4 604 7.173 8 610 2.015 2.571 .365 4.032 5.893 6.869 1.943 2.447 3.143 3.707 5,208 5.959 1.894 2.365 2.998 3.499 4.785 5 408 1.860 2.306 2.896 3.355 4.501 5.041 1.833 2.262 2.821 3.250 1,297 4 781 1.812 2.228 2.764 3.169 4.144 4.587 1.796 2.201 2.718 3.106 4.025 4.437 1.782 2.179 2.681 3.055 3,930 4.318 1.771 2.160 2.650 3 012 3,852 4.221 1.761 2.145 2.624 2977 3.787 4.140 1.753 2.131 2.602 2947 3.733 4.073 1.746 2. 120 2.583 2921 3.686 4:015 1.740 2.110 2.567 2.898 3.646 3.965 1.734 2.101 2.552 2 878 3.610 3.922 1.729 2.093 2.539 2 861 3.579 3.883 1.725 2.086 2.528 2 845 3.552 3.850 1.721 2.080 2.518 2.831 3.527 3.819 1.717 2.074 1.508 2.819 3.505 3.792 1.714 2.069 2.500 2 807 3,485 3.768 1.711 2.064 2.492 2.797 3.467 3.745 708 2.060 2.485 2.787 3.450 3.725 1.706 2.056 2,479 2.779 3.435 3.707 1.703 2.052 2.473 2.771 3.421 3.690 1.701 2.048 2.467 2 763 3.408 3.674 1 649 2 756 3 396 3659 9:40 AM ~ $ 1) ENG O Type here to search File . 9ECO... e Cou.. Cou... W EXA.. ECO. 01-Mar-21