this is the question

Consider the model y = XB+E, where E(e|X) ==0 and V(e|X) = N. 1. Derive the expected value and covariance matrix of the estimator BaLs=(X'a'X)X'N'y. (1) 2. Consider the case where you have the model discussed here, but instead of using (1) to estimate you applied the OLS estimator. Please derive the expected value and covariance matrix of the OLS estimator umder the model assumptions given in this problem. Is OLS biased in this setting? Is it efficient? 3. What would N look like if we have heteroskedasticity? Can you estimate the elements of N if you do not impose any restrictions on the heteroskedasticity? If you assume that the heteroskedasticity depends on some variables w, how can you proceed to produce a feasible version of the estimator in (1)?

A Company produces several lines of products, but one (they call it "product X") uses unique parts to produce it and the demand is very seasonal. There are some possible variations in the design, so the company tends to use available-to-promise logic to master schedule the product. Since the components to produce it are quite expensive, the company tries very hard to minimize any inventory of the product or its components during the seasons with very low sales. Product X is just now entering the low season, and the following chart represents the forecast data and actual customer orders for the next ten weeks:

Week 1 2 3 4 5 6 7 8 9 10 Forecast 25 20 16 16 15 15 13 11 10 9 Customer Orders 27 21 16 13 11 9 7 4 3 2 Master Production Schedule 50 50 50 There are currently (at the start of week 1) 27 product X left in inventory. The following represents the product structure for product X:

X = A, D, B(2), C(2)

The following table gives the relevant data for components A, B, C, and D at the start of week 1:

Component A B C D Starting Inventory 0 22 212 63 Lead Time (weeks) 2 1 2 4 Lot Size 60 100 250 100 Safety Stock 0 0 0 0 In addition, component A has a scheduled receipt of 60 units for week 2.

You are asked to:

Complete the master schedule for product X, Create MRP grids for each of the components for the next 5 weeks. Discuss the situation that if they cannot promise to deliver in the specified deadline (for example, three additional units of product X for week 4), what is the best that you can do based on the information you have?

Clubroot is a current disease concern in canola production in western Canada. Canola is a very important crop in western Canada, both in terms of area and economic value. Based on the economics of production and supply, answer the following questions using economic principles.

A) The main tools that have been available to producers are focused on prevention.( e.g., rotations, equipment sanitation). Producers who have a clubroot infestation have limited options, being forced to take a break from canola production in the infested field. Bio-pesticide as potential future developments to control clubroot infestations. Limes as a potential agent for controlling clubroot. Given this information, from an individual perspective, how would the risk of clubroot affect the decision-making regarding canola production? In other words, if clubroot is a significant concern, what aspects (if any) of the basic producer problem would be affected and in what ways?

B) Suppose that prevention or control of clubroot were to become a practical consideration for a majority of canola producers in western Canada. what effect would this have on the supply of canola? would this effect represent a change in supply quantity or a shift in supply, or both? Why?

C) Would you expect the scenario represented in part B of this question to have any impact on the supply function for wheat? why or why not?

The following questions use data from Japan, where the government sets the price of health care. Each prefecture in Japan has a different set of prices, with data from 1999 below:

Region

Outpatient visits (Q) Price/visit (P) Tokyo

1.25/month 20 Hokkaido

1.5/month 10

1. Think of these as two points on the demand curve for outpatient visits. What is the price elasticity of demand for health care in Japan at a price of 20? What is the price elasticity of demand at a price of 10?

2. Using your calculation of the elasticity at P = 20, what would you predict for Q if the price in Tokyo was raised to 30? Using your calculation of the elasticity at P = 10, what would you predict for Q if the price in Hokkaido was lowered to 5?

You continue to observe this health care system into the year 2000, when both regions were given new prices.

Region

Outpatient visits (Q) Price/visit (P) Tokyo

1.0/month 30 Hokkaido

1.2/month 15

3. What is the price elasticity in 2000 at a price of 30, and what is the price elasticity at a price of 15?

4. Now take the numbers for both tables, and think in terms of separating the two cities. Using just Tokyo data to establish the demand curve/slope, what is the price elasticity of demand at P = 20, and what is it at P = 30? Using just Hokkaido data to establish its own demand curve/slope, what is the price elasticity of demand for prices of 10 and 15?

5. Using your elasticities from (e) - what would you predict for Q if the price in Tokyo was raised the next year from 30 to 60? What would you predict in Hokkaido if the price is raised from 15 to 60?

6. Write down a few difficulties with estimating price sensitivity (elasticity) in the market for health care.

1- Company YSJ approaches your financial institution for a bankers' acceptance (BA), with a face value of $7,000,000, for a 90-day term. Assuming the discount rate is 2.74%, what will the BA trade for today? Also, provide calculations that show YSJ's true cost, on an annual basis.

2- A T-bill's current price is $982, and has 182 days to maturity; using calculations, show the difference between the bond discount yield (rBDY) and bond equivalent yield (rBEY). Also, use the formula from class, to calculate the rBEY, given your rBDY value

Suppose Bruce's Blue Water ('BBW') has a monopoly in the market for water in Bingworld.

Explain why BBW's marginal revenue curve sits below the demand curve it faces. If demand is a downward-sloping straight line, what is the relationship between the slope of the demand curve and that of the marginal revenue curve?

Suppose BBW faces a demand curve of P = 100 - 8Q, where Q is in megalitres. If the monopolist also has a constant marginal cost of $4 per megalitre, what is the price and quantity it will charge to maximise its profit?

If BBW's maximum profit is $168, how much are their fixed costs? Calculate the ATC at the profit maximising quantity and graph the area that represents this maximum profit, including the ATC, MR, MC and Demand curves.

Assume you are a small oil refinery that buys crude oil in US dollars. Assume the refinery takes a futures position on six (6) March NYMEX (www.nymex.com) crude oil contracts(Light Sweet Crude Oil) to hedge their price risk. The futures contract price is opened at 45.00/barrel and assume this was also the settle price for that day (i.e. day 1).

Below are the following daily closes (i.e. settle) that occurred for the three consecutive days following the day the business opened their futures position. (All prices are in US $).

Day 2: $42.00/barrel

Day 3: $46.00/barrel

Day 4: $51.00/barrel

Briefly explain and show the transactions that occur in the margin account over these 4 days (i.e. marking to market, margin calls etc). Please be specific with the numbers and the position (buy/long or sell/short) taken on day 1. Assume that initial margin was set at 8% of nominal contract value on day one. Maintenance was set at 5% of nominal contract value on day 1.

d) If contributing the amount in c) is voluntary? What would you expect to happen? If the families voted on whether to tax themselves that amount in order to provide light, would the vote pass? Explain why or why not. 5. A small neighborhood in the suburbs would like to upgrade the landscaping at the entrance tc the neighborhood. There are 50 houses in the neighborhood, and the landscaping will cost $2,000. The neighborhood association owns the land, but doesn't have funds to pay for the landscaping. So the association is asking each household to voluntarily contribute S40. Each household values the landscaping at $200. a) Assume that it is possible to buy a fraction of landscaping. which is valued proportionately (i.e., 50% of the landscaping would cost $1,000 and is worth $100 to each family). Set up an accounting table labeling a single household's costs and benefits to contributing $40, and the societal costs and benefits. If contributions are voluntary, what is the individual decision regarding contributing?