Problem 3: VSL

a) Describe VSL (i.e., “Value of a Statistical Life”) in terms that a non-economist can understand, taking care to “de-stigmatize” this economic concept (i.e., explain why it should not be considered as controversial as it is often portrayed).

b) Lavetti (2012) studies the wage-risk tradeoff for one of the riskiest professions in the United States: crab fishing in Alaska. The riskiness of crab fishing is driven mainly by the season and weather conditions. Lavetti collects data on the weather conditions of specific fishing trips, and the wages paid to the crew. He then runs a regression of the wage on the expected fatality rate for each trip and finds that an increase in one fatality per 1000 full time workers per year increases the mean hourly wage by $2.10. Calculate the VSL implied by this estimate, assuming that the number of hours a full-time worker works in a year is 2000.

c) Does this number seem high or low to you? Briefly discuss why this might be the case.

Write an Application that extends the Thread class, call it MyThread.java. Have your new class accept an integer(i.e. 200) when it is instantiated. (MyThread mt = new MyThread(200); )
This integer number will be the number of times that this class loops and prints a message. The message should read “Thread Running...200”. The 200 would be whatever number is passed into the constructor. If the number was 300, then the output should read “ Thread Running ..... 300”. Use a main method to test this class. In the main start 2 Threads, one Thread with 250 and one Thread with 300. What happens? You do not need to use the sleep() method for this exercise.

2. 2.) Modify 1.) from above. Change this class to use the Runnable Interface instead of the Thread class. Any difference how the code runs?

3. 3.) Lastly, have the main method start 4 different threads, all with different loop counts. Test the application, what happens?

PLEASE provide a screenshot or image of the code running!

5. Two brands of coffee were compared. Two independent random samples of 50 people each were asked to taste either Brand A or Brand B coffee, and indicate whether they liked it or not. Eighty four percent of the people who tasted Brand A liked it; the analogous sample proportion for Brand B was ninety percent.

(A) [8] At α = 0.01, is there a significant difference in the proportions of individuals who like the two coffees? Use the p-value approach.

(B) [1] What is the critical value(s) for the test in Part(A)?

(C) [2] Construct a 99% confidence interval for the difference in the proportions of people who like Brand A and Brand B coffees.

(D) [2] Do we use the same estimate of the standard deviation of ˆp1 − pˆ2 in parts (A) and (C)? Explain.

Calculate ANOVAs for the following two problems. Show all your work.

This study examined how long it took for mothers to get their children back home when the children were 5 months, 20 months, and 35 months old. Does the data indicate significant differences?

5 months: 15, 10, 25, 15, 20, 18

20 months: 30, 15, 20, 25, 23, 20

35 months: 40, 35, 50, 43, 45, 40

A sociologist was hired by a large city hospital to investigate the relationship between the number of unauthorized days that employees are absent per year and the distance (miles) between home and work for the employees. A sample of 10 employees was chosen, and the following data were collected.

Using Excel Data Analysis, find the value of the test statistic. (Round your answer to two decimal places.)

Use the estimated regression equation (Y-hat = 8.098 + -0.344X) to develop a 95% confidence interval for the expected number of days absent for employees living 7 miles from the company. (Round your answers to one decimal place.)

_______Days to _______ Days

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. Regular price 138 121 123 116 116 122 132 Reduced price 143 133 151 136 144 123 130 131 Click here for the Excel Data File At the 0.010 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. Compute the pooled estimate of the variance. (Round your answer to 3 decimal places.) Compute the test statistic. (Round your answer to 2 decimal places.) State your decision about the null hypothesis. Reject H0 Fail to reject H0

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 0.10 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.

• Fail to reject H₀

• Reject H₀

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.

  Click here for the Excel Data File

At the 0.010 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.

• Fail to reject H₀

• Reject H₀

B. MONOPOLY

A corporation buys up all the individual one-person businesses and operates them as one corporation. The individuals work for the corporation as employees. There is now one corporation (Washington Physical Therapy Company) providing this service to everyone in the metropolitan area.   Technology and the actual services do not change.

For the Corporation:

Fixed cost per day: $4,000 (this is 100 times $40)

Variable cost per day for the Company (travel, supplies, etc.) based on existing operations of all 100 employees:

$40 for the first 500 sessions in a day

                        $45 for the 600^th   to 699^th session in a day

                        $50 for the 700^th to 799^th session in a day

                        $60 for the 800^th to 899^th session in a day.

                        $70 for the 900 to 999^th session in a day.

1. Complete the cost schedule for the Company

2. On the Monopoly Graph at the end of this assignment, Graph the Marginal Cost (which is like a supply curve) and the Average Total Cost for the Company.

3. Graph the Demand Curve (Demand has not changed).

4. Determine the Total Revenue and the Marginal Revenue based on the Demand Schedule:

4. Graph the Marginal Revenue (at the quantity midpoint). E.g. graph $70 at a quantity of 150

5. Determine the profit maximizing level of output

6. What price will the company charge?

7. What will be the profit per unit (one physical therapy session) and the total company profit per day?

8. How does the price and quantity compare with the price and quantity before the industry became a monopoly?

9. Can we expect these profits to persist over time? Why or why not?

10. What are the implications for society?