On a separate sheet of paper, draw a Lorenz Curve for the United States, using the 2017 values for income quintiles. Label each kink point carefully, and draw the diagonal equality Lorenz Curve. Calculate the Gini Coefficient, and show your work. This is a long and tedious math problem, where you find the areas of triangles, rectangles and trapezoids over and over to get the areas needed for the formula.

2017: Shares of aggregate income

A firm manufactures a product in the United States. Its costs of production and shipping are $100. It sells the product in Silliestan for 1000 Zlotys which is equivalent to $500 (2 Zlotys = $1). Costs of distribution and selling in Silliestan are $100 (200 Zlotys) so the firm has a profit of $300. Within the next year, the Zloty is expected to fall from 2 Zlotys to the dollar to 4 Zlotys to the dollar while inflation in Silliestan is expected to be 100%. US costs, in dollars, are not expected to change.

Show all calculations. No points for the correct answers without calculations.

a) Given these expected changes, how many Zlotys will it cost, in total, to make the product in the United States and to sell it in the foreign country? The total costs of manufacture, shipping and sales will be ______________________ Zlotys. 2 points

b) If you sell the product for 1000 Zlotys, how much would your profit or loss be? ________ Zlotys 2 points

c) What other factors should be taken into account when setting a price? Be specific. 1 point.

d) If your company sells the same product in a neighboring country for a higher price, this would give rise to a ____________________ market. 1 point

e) If the foreign country were to ask your firm to take partial payment in a local product, say turnips, this would be an example of ________________________ . 1 point.

The heights of women aged 20 to 29 in the United States are approximately Normal with mean 65.1 inches and standard deviation 2.7 inches. Men the same age have mean height 70.2 inches with standard deviation 2.9 inches. NOTE: The numerical values in this problem have been modified for testing purposes. What are the z-scores (±0.01) for a woman 6 feet tall and a man 6 feet tall? A woman 6 feet tall has standardized score A man 6 feet tall has standardized score

QUESTION 2:

Use Table A to find the proportion of observations from a standard Normal distribution that satisfies each of the following statements. Give your answers to four decimal places.

a)  z < -0.77=

b) z > -0.77=

c)  z < 1.31=

d) -0.77 < z < 1.31=

For a certain drug, based on standards set by the United States Pharmacopeia (USP) - an official public standards-setting authority for all prescription and over-the-counter medicines and other health care products manufactured or sold in the United States, a standard deviation of capsule weights of less than 1.5 mg is acceptable. A sample of 32 capsules was taken and the weights are provided below:

(Note: The average and the standard deviation of the data are respectively 100 g and 1.72 g.)

At 10% significance level, test the claim that the standard deviation of capsule weights of the drug is different from 1.5 g.

Procedure: Select an answer

One proportion Z Hypothesis Test

One mean Z Hypothesis Test

One variance χ² Hypothesis Test

One mean T Hypothesis Test

Assumptions: (select everything that applies)

• Sample size is greater than 30
• The number of positive and negative responses are both greater than 10
• Population standard deviation is known
• Population standard deviation is unknown
• Simple random sample
• Normal population

Step 1. Hypotheses Set-Up:

Step 2. The significance level α= %______

Step 3. Compute the value of the test statistic: Select an answer χ²₀ ,t₀ ,z₀, f₀  = (Round the answer to 3 decimal places)

Step 4. Testing Procedure: (Round the answers to 3 decimal places)

Step 5. Decision:

Conclusion: Select an answer

-Do not reject the null hypothesis in favor of the alternative.

-Reject the null hypothesis in favor of the alternative.

Step 6. Interpretation:

At 10% significance level we Select an answer (DO ,NOT DO) have sufficient evidence to reject the null hypothesis in favor of the alternative hypothesis.

The income of males in each state of the United States, including the District of Columbia and Puerto Rico, are given in table #9.3.3, and the income of females is given in table #9.3.4 ("Median income of," 2013). Is there enough evidence to show that the mean income of males is more than of females? Test at the 1% level.

Table #9.3.3: Data of Income for Males

Table #9.3.4: Data of Income for Females

1. Hospitals: Currently, there are 5723 registered hospitals in the United States.

1. Are the numbers of hospitals in different states discrete or continuous?

Answer: ________________

2. What is the level of measurement for the number of hospitals in different years? Pick one (nominal, ordinal, interval, ratio)

Answer: ________________

3. A survey is conducted by randomly selecting 10 patients in every hospital, what type of sampling is used? Pick one (random, systematic, convenience, stratified, cluster)

Answer: ________________

4. If a survey is conducted by randomly selecting 20 hospitals and interviewing all of the members of each board of directors, what type of sampling is used? Pick one (random, systematic, convenience, stratified, cluster)

Answer: ________________

Case 2: The Market for Terrorism

“It is vitally important for the United States to anticipate and possibly offset future terrorist attacks. Similarly, it is necessary to know whether certain government leaders might be overthrown or what developments in other parts of the world might occur such as Russia invading Georgia or Poland. How can such information be obtained? Could markets be used? A few people thought the best method would be to create a market whereby people could speculate on certain events and could profit from correct predictions. The Defense Advanced Research Projects Agency (DARPA), a research think tank within the Department of Defense, decided to create a market through which traders could buy and sell contracts that specified various events. For example, contracts could be based on questions such as ‘How fast will the non-oil output of Egypt grow next year?’ or ‘Will the U.S. military withdraw from country A in two years or less?’ The concept was to discover whether trading in such contracts could help to predict future events and how connections between events were perceived.

Critics tore into DARPA for creating a way to bet on terrorism. It was argued that a terrorist could bet on some act of terrorism and then carry it out, thereby profiting on tragedy. Once people started to hear about the DARPA project, funding was cut and all research related to it was terminated.

1. What information can markets provide that spies, informants and others might not?
2. How could a market provide information about terrorism?”

Rotelco is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 100 million direct subscribers (accounts) that generated revenue of $30,200 million. Costs and expenses for the year were as follows:

Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts).

a. What is Rotelco's break-even number of accounts, using the data and assumptions above? Round to the nearest whole number.
million accounts

b. How much revenue per account would be sufficient for Rotelco to break even if the number of accounts remained constant? Round to the nearest dollar.
$ million per account

In the United States patents are the primary tool to encourage the private sector to develop new drugs. Discuss the following issues. (1) What are the proncipal advantages and disadvantages of relying on the patent system to rpovide incentive to develop new drugs? (2) What are the strengths and weaknesses of using price controls on patented drugs to eliminate some of the most egregarious price increases made by firms with patents?