The owner of a small car-rental service is trying to decide on the appropriate numbers of vehicles and mechanics to use in the business for the current level of operations. He recognizes that his choice represents a trade-off between the two resources. His past experience indicates that this trade-off is as follows:

VehiclesMechanics

1002.5 (include one part-timer)

705

5010.

4015

3525

3235

1.Assume that annual (leasing) cost per vehicle is $6,000 and the annual salary per mechanic is $25,000. What combination of vehicles and mechanics should he employ?

2.Illustrate the problem with the use of an iso-quant/iso-cost diagram with number of vehicle leased on horizontal axis and number of mechanics hired on vertical axes. Draw two iso-cost curves: one using annual the leasing cost per vehicle ($6,000) and the annual salary per mechanics ($25,000) given in the problem. In this case leasing vehicle cost is relatively inexpensive to the annual salary per mechanics, Now, another iso-cost curve, hypothetical (no data given) this time, in which annual mechanics cost is relatively inexpensive to vehicle leasing cost. Indicate graphically the (two) optimal combinations of mechanics hired and vehicles with one iso-quant curve representing a given (target) level of vehicle leasing business with two iso-cost curves; one based on given values of the annual cost of hiring mechanics and leasing vehicles in the problem and a

QUESTION 9 Which ofthe following is NOT an assumption in the Law of Large Number? If) t. each random variable has identical expectation. '3' B. each random variable has identical variance. Inn C. the expectation of each random variable must be zero. \\_z If} D. none of the above. QUESTION 11:! For a large number of random variables with identical expectation of 1D, and also satisfy all the assumptions of the Law of Large Number, then the simple average of the random variables is; CIA. 1D. If} B. close to 11\".] with probability close to 1. If} C. close to wii probability close to '1. Q D. none of the above. Problem 2 (More on sufficiency). Let 0 be an estimator for a parameter 0, and suppose that V(0)