The manufacturer of an MP3 player wanted to know whether a 10% reduction in price is enough to increase the sales of its product. To investigate, the owner randomly selected eight outlets and sold the MP3 player at the reduced price. At seven randomly selected outlets, the MP3 player was sold at the regular price. Reported below is the number of units sold last month at the regular and reduced prices at the randomly selected outlets.

At the 0.100 significance level, can the manufacturer conclude that the price reduction resulted in an increase in sales? Hint: For the calculations, assume reduced price as the first sample.

1. Compute the pooled estimate of the variance. (Round your answer to 3 decimal places.)

2. Compute the test statistic. (Round your answer to 2 decimal places.)

3. State your decision about the null hypothesis.

A seller wishes to auction a single unit of an indivisible object. She can do so in one of the following two ways (i) through a first-price auction to n bidders, (ii) through a second-price auction with optimally chosen reserve price to n - 1 bidders. Each bidder's valuation is private information and is an independent draw from the uniform distribution on [0, 1]. The seller values the object at 0.

(a) Which of the two alternatives would you recommend to the seller?

(b) Show that for a large number of bidders, the seller would be indifferent between the two alternatives.

Tom, the only steel drum manufacturer in Narnia, can sell a single drum for $30. However, for every extra drum he wants to sell, he is forced to reduce the price (for all his customers) by $2. The total fixed costs in his workshop are $15, and the variable cost of the first drum produced is $25. For each extra drum thereafter, the cost drops by $5 up to, and including, the fifth drum. After that, the cost of each extra drum increases by $5.

What is Tom’s profit-maximizing output, price, and total profit or loss?

Output:

Price: $   

Profit/loss: $

Consider aduopolistic market wheredemand is given byP= 36 - 3Q, where Q = Q1 + Q2. For each duopolist, the constant per unit marginal cost is $18/unit and fixed costs are zero. a. Assume first that the duopolists hold Cournot conjectures when they make their choices. Find the Cournot equilibrium price, quantity, and profits. b. Now find the equilibrium price, quantity, and profits assuming the duopolistic competition as Bertrand. c. Find the equilibrium um price, quantity, and profit for each firm, assuming the firms act as a Stackelberg leader and follower, with Firm 1 as the leader.

A key issue with modeling net returns as a normal distribution is

A.
Returns are not mean zero

B.
Due to stock price decimalization, some returns are irrational numbers which are not part of the normal distribution

C.
Returns only make sense in the long run. Hence, in the short run, returns do not follow normal distribution

D.
Stock Returns have a finite downside of -100%

IBM has just issued a callable (at par) 5 year, 9% coupon bond with quarterly coupon payments. The bond can be called at par in two years or anytime thereafter on a coupon payment date. It has a price of $102 per $100 face value, implying a yield to maturity of 8.78%. What is the bond's yield to call?

1. A pair of shoes cost 80 euros in France. The same pair of shoes cost $100 in the U.S.
2. 1. Assuming you would like to pay less, where would you buy the shoes?
   2. Suppose instead the exchange rate is $1.3 per euro. What is the $ price of shoes in France?
   3. Assuming you would like to pay less, where would you buy the shoes?

Suppose a monopolist is can price discriminate between two groups of consumers. Group 1 has demand function given by P1 = 100-2Q1 and group 2 has demand function given by P2 = 200-4Q2. Suppose this monopolist has constant marginal cost of $20 and zero fixed cost.

Calculate consumer surplus, producer surplus, and total welfare in this market.

A school states that average tuition of their training program for various certifications taught there is $995 with a standard deviation of $100. You are not sure which course to take and just decided to enroll in a certificate course at random.

What is the probability that the tuition for the course is between $900 and $1050?

You plan to register for 9 certifications. What is the probability that the average price of certifications is between $900 and $1050?