ECONOMETRICS 2

1) Consider the following estimated regression equation where the sample size is 78 (quarterly data):

IND - OUTPUT (dependent variable): Industrial Production Index.

PRICE (independent variable): Industrial Price Index.

LOGIND-OUTPUT= -76.5- 0.39 LOG(PRICE)

                t statistics:                                 (-1.35)    (-0.72)         

a) Interpret and test the coefficient of LOG(PRICE)?

       Assume that an additional regression was run as:

LOGIND-OUTPUT= -33.5 +0.46 LOGPRICE+0.009 T

                t statistics:                          (-4.63)    (2.78)                        (3.55)

where T is a time trend.

b) Interpret the coefficient of T variable, and conduct a test to decide on its significance? What kind of a trend is it (Linear , nonlinear…)?

c) What might be a reason for the intercept and the coefficient of LOG(PRICE) to change in the second equation compared to the first one? What is your decision now about the relationship between the IND - OUTPUT and PRICE variables?

d) What is this kind of a specification error called? Which regression equation do you trust more and why? What is the first regression called?

Economics for Organizational Management. Chapter 14 Advanced Pricing Techniques?

Discuss how pricing your product according to first-degree, second-degree, or third-degree methods of price discrimination can generate greater revenue and profit than charging a single, uniform price.?

5. Answer the following on marginal revenue.

a. Suppose a firm operates in a perfectly competitive market where the market price is $100. What is the marginal revenue for selling an additional unit for this firm? Please explain how the marginal revenue compares to price.

b. Suppose a firm operates in monopolistically competitive market where it sells 5 units at a price of $30 per unit. If it lowers its price to$29, it sells 6 units. What is the marginal revenue of selling the sixth unit? Please explain how the marginal revenue compares to price.

c. Explain how the marginal revenue curve for a perfectly competitive firm differs from the marginal revenue curve for a monopolistically competitive firm.

the technology for cutting hair has changed in the last 100 years, whereas technology for growing wheat has improved dramatically. What do you think happened to the relative prices of haircuts and wheat? What do you think has happened to the relative income of barbers and farmers? Explain how this is possible. The price elasticity of demand for a good measures how much the quantity of the good demanded responds to a decline in the goods price. Specifically, the price elasticity of demand is the ratio of the percentage change in quantity demanded to the percentage change in price. How is a good's price elasticity of demand related to whether technological progress in producing a good will lead to a rise of decline in the share of the economy's tota spending on that good?

5. The supply curve for butter is QS = 100 + 3P
Where QS   is the quantity supplied of butter (in millions of kilos per year) and P is the price of butter ( in Kwacha per Kilo). If the demand curve for butter is a vertical line at QD = 106 millions of kilos per year.
( a ) If the government imposes a price floor of K1 per kilo on butter, will there be an excess supply or excess demand of butter, and how big will it be?
(b ) If the government’s price floor is set at K3 per kilo, will there be an excess supply or excess demand of butter, and how big will it be?
( c) Under the conditions described in part (a) , what is the price elasticity of demand for butter? Do you regard this as a realistic value for this price elasticity? Explain.

The estimated demand function for commodity X is described by the following equation:

Qd = 50 – 2Px + 1.5 In - 0.75 Py

where Px = Price of commodity X

In = Consumer Income

Py = Price of commodity Y

(a)Does the behavior of the consumer of this product follow the law of demand? Explain

(b)Is commodity X a normal good or an inferior good? How did you know?

(c)Comment on the relationship between commodity X and commodity Y.

(d)Find price elasticity of demand, income elasticity of demand and cross price elasticity of demand given that the price of commodity X is $5 per unit, consumer’s income is $100 and commodity Y sells for $10 per unit.

Coding Project 2: UDP Pinger

In this lab, you will learn the basics of socket programming for UDP in Python. You will learn how to send and receive datagram packets using UDP sockets and also, how to set a proper socket timeout. Throughout the lab, you will gain familiarity with a Ping application and its usefulness in computing statistics such as packet loss rate.

You will first study a simple Internet ping server written in the Python, and implement a corresponding client. The functionality provided by these programs is similar to the functionality provided by standard ping programs available in modern operating systems. However, these programs use a simpler protocol, UDP, rather than the standard Internet Control Message Protocol (ICMP) to communicate with each other. The ping protocol allows a client machine to send a packet of data to a remote machine, and have the remote machine return the data back to the client unchanged (an action referred to as echoing). Among other uses, the ping protocol allows hosts to determine round-trip times to other machines.

You are given the complete code for the Ping server below. Your task is to write the Ping client.

Server Code

The following code fully implements a ping server. You need to compile and run this code before running your client program. You do not need to modify this code.

In this server code, 30% of the client’s packets are simulated to be lost. You should study this code carefully, as it will help you write your ping client.

# UDPPingerServer.py

# We will need the following module to generate randomized lost packets import random
from socket import *

# Create a UDP socket
# Notice the use of SOCK_DGRAM for UDP packets

serverSocket = socket(AF_INET, SOCK_DGRAM)

# Assign IP address and port number to socket

serverSocket.bind(('', 12000))

while True:

# Generate random number in the range of 0 to 10
rand = random.randint(0, 10)
# Receive the client packet along with the address it is coming from message, address = serverSocket.recvfrom(1024)
# Capitalize the message from the client
message = message.upper()

# If rand is less is than 4, we consider the packet lost and do not respond if rand < 4:

continue

# Otherwise, the server responds

serverSocket.sendto(message, address)

The server sits in an infinite loop listening for incoming UDP packets. When a packet comes in and if a randomized integer is greater than or equal to 4, the server simply capitalizes the encapsulated data and sends it back to the client.

Packet Loss

UDP provides applications with an unreliable transport service. Messages may get lost in the network due to router queue overflows, faulty hardware or some other reasons. Because packet loss is rare or even non-existent in typical campus networks, the server in this lab injects artificial loss to simulate the effects of network packet loss. The server creates a variable randomized integer which determines whether a particular incoming packet is lost or not.

Client Code

You need to implement the following client program.
The client should send 10 pings to the server. Because UDP is an unreliable protocol, a packet sent from the client to the server may be lost in the network, or vice versa. For this reason, the client cannot wait indefinitely for a reply to a ping message. You should get the client wait up to one second for a reply; if no reply is received within one second, your client program should assume that the packet was lost during transmission across the network. You will need to look up the Python documentation to find out how to set the timeout value on a datagram socket.

Specifically, your client program should
(1) send the ping message using UDP (Note: Unlike TCP, you do not need to establish a connection first, since UDP is a connectionless protocol.)
(2) print the response message from server, if any
(3) calculate and print the round trip time (RTT), in seconds, of each packet, if server responses
(4) otherwise, print “Request timed out”

During development, you should run the UDPPingerServer.py on your machine, and test your client by sending packets to localhost (or, 127.0.0.1). After you have fully debugged your code, you should see how your application communicates across the network with the ping server and ping client running on different machines.

Message Format

The ping messages sent to the server in this project are formatted in a simple way. The client message is one line, consisting of ASCII characters in the following format:

Ping sequence_number time

where sequence_number starts at 1 and progresses to 10 for each successive ping message sent by the client, and time is the time when the client sends the message.

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I cannot get my version to work, please follow the instructions.

Helix Corporation uses the weighted-average method in its process costing system. It produces prefabricated flooring in a series of steps carried out in production departments. All of the material that is used in the first production department is added at the beginning of processing in that department. Data for May for the first production department follow:

Required:

1. Calculate the first production department's equivalent units of production for materials and conversion for May.

2. Compute the first production department's cost per equivalent unit for materials and conversion for May.

3. Compute the first production department's cost of ending work in process inventory for materials, conversion, and in total for May.

4. Compute the first production department's cost of the units transferred to the next production department for materials, conversion, and in total for May

Calculate the first production department's equivalent units of production for materials and conversion for May.

Compute the first production department's cost per equivalent unit for materials and conversion for May. (Round your answers to 2 decimal places.)

Compute the first production department's cost of ending work in process inventory for materials, conversion, and in total for May. (Round your intermediate calculations to 2 decimal places.)

Compute the first production department's cost of the units transferred to the next production department for materials, conversion, and in total for May. (Round your intermediate calculations to 2 decimal places.)