The following data show the brand, price ($), and the overall score for 6 stereo headphones that were tested by Consumer Reports. The overall score is based on sound quality and effectiveness of ambient noise reduction. Scores range from 0 (lowest) to 100 (highest). The estimated regression equation for these data is  = 20.397 + 0.346 x, where x = price ($) and y = overall score.

Round your answers to three decimal places.

a. Compute SST, SSR, and SSE.

b. Compute the coefficient of determination r ². Comment on the goodness of fit.

r ² =

c. What is the value of the sample correlation coefficient?

r =

The following data show the brand, price ($), and the overall score for six stereo headphones that were tested by a certain magazine. The overall score is based on sound quality and effectiveness of ambient noise reduction. Scores range from 0 (lowest) to 100 (highest). The estimated regression equation for these data is

ŷ = 23.194 + 0.318x,

where x = price ($) and y = overall score.

(a) Compute SST, SSR, and SSE. (Round your answers to three decimal places.)

SST =  

SSR =

SSE =

(b) Compute the coefficient of determination r².  (Round your answer to three decimal places.)

r² =

(c) What is the value of the sample correlation coefficient? (Round your answer to three decimal places.)

- If you do not want to early-exercise the call, you should hold the option until expiration.

True / False

- It can be optimal to early-exercise an American currency call option.

True / False

- It can be optimal to early-exercise an American put option on a non-dividend-paying stock.

True / False

- The price of an American oil put option can never decline with an increase in time to expiration.

True / False

The price of a European call option on a non-dividend-paying stock can never decline with an increase in time to expiration.

True / False

- The price of a European put option on a dividend-paying stock can decline with an increase in time to expiration.

True / False

If it is optimal to exercise a 100-strike call option, it is also optimal to exercise an otherwise identical 110-stike call.

True/False

Problem 4

Frederick Company adopted the dollar-value LIFO method on January 1, 2015 (using internal price indexes and multiple pools). The following data are available for inventory pool A for the 2 years following adoption of LIFO.

At Base-         At Current-    Price

Inventory                    Year Cost       Year Cost       Index

1/1/15                          $100,000         $100,000         100

12/31/15                      120,000         126,000         105

12/31/16                      128,000         143,360         112

Using the dollar-value LIFO method, at what amount should the inventory be reported at December 31, 2016?

Problem 4

Computation of price indexes:

            Dollar-value LIFO inventory 12/31/15:

            Dollar-value LIFO inventory 12/31/16:

1. When would Cournot competition seem like a more reasonable model than Bertrand competition?

1. Output levels can be quickly changed in response to price changes
2. Production capacity is difficult to change

For the next three problems use the following data. Two firms in a duopoly each have a constant marginal cost of 4. The price function (demand) is P(Q)=100-Q.

2. Suppose that Firm 1 believes that Firm 2 will produce half of the monopoly output, q₂=24. How much should Firm 1 produce to maximize profit in the current period?

1. 0
2. 36
3. 24
4. 48

3. What is the Cournot Nash equilibrium level of output for Firm 1?

1. 96
2. 48
3. 32
4. 24

4. If competition is instead price competition a la Bertrand with identical products what will the equilibrium level of output be for each firm?

1. 96
2. 48
3. 32
4. 24

Shanghai Company sells electronic equipment that it acquires from the US. During the year 2014, the inventory records reflected the following:

At the end of 2014, 45 units are still on hand at the end of year 2014. Shanghai sell its electronic equipment at a fixed price of $100 each. Required:

1. Determine the cost of goods sold and the cost of ending inventory assuming the company uses FIFO.

2. Determine the amount of gross profit that would be reported for the year.

3. Given the price trend shown above, which valuation method (FIFO, LIFO, or Weighted Average) will result in the lowest gross profit?

4. Given the price trend shown above, which valuation method (FIFO, LIFO, or Weighted Average) will result in a better matching of Revenues & Cost of goods sold? Explain.

Home Hardware reported beginning inventory of 20 shovels, for a total cost of $100. The company had the following transactions during the month: Jan. 2 Sold 4 shovels on account at a selling price of $10 per unit. Jan 16 Sold 10 shovels on account at a selling price of $10 per unit. Jan 18 Bought 5 shovels on account at a cost of $5 per unit. Jan 19 Sold 10 shovels on account at a selling price of $10 per unit. Jan 24 Bought 10 shovels on account at a cost of $5 per unit. Jan 31 Counted inventory and determined that 10 units were on hand.

Record a journal entry that shows all goods initially on hand at the beginning of the period (in the Inventory account) and all goods bought during the period (in the purchases account) as having been sold by the end of the period.

In some cities, Uber has a monopoly on ride-sharing services. In one of these cities, the demand curve on weekdays is given by P = 50 - Q. However, during weekend nights, or surge hours, the demand for rides increases dramatically and the new demand curve is P = 100 - Q. Assume that the marginal cost and the total fixed cost are both zero.

1. Determine the profit maximizing price during weekdays and during surge hours.

2. Determine the profit maximizing price during weekdays and during surge hours if MC = 10 instead of zero.

3. Draw a graph showing the demand, marginal revenue, and marginal cost curves during surge hours from part (2), indicating the profit maximizing price and quantity. Determine Uber’s profit and the DWL during surge hours, and show them on a graph.

ANSWER ALL PARTS THANKS

Refer to the table given below. Suppose that aggregate demand increases such that the amount of real output demanded rises by $7 billion at each price level.

By what percentage will the price level increase?  percent

Will this inflation be demand-pull inflation or will it be cost-push inflation?   (Click to select)   Demand-pull inflation   Cost-push inflation

If potential real GDP (that is, full-employment GDP) is $510 billion, what will be the size of the positive GDP gap after the change in aggregate demand? $  billion

If the government wants to use fiscal policy to counter the resulting inflation without changing tax rates, would it increase government spending or decrease it?   (Click to select)   Increase   Decrease

1. Aggregate demand and aggregate supply schedules in Burgazistan are given as follows:

1. What is the short-run macroeconomic equilibrium GDP level? (5 pts)
2. What is the equilibrium price level?

Suppose that the initial equilibrium you found in “a” is at the long run aggregate supply curve and the economy receives a negative demand shock which decreases aggregate demand by 100 at each price level.

3. What is the new short-run macroeconomic equilibrium GDP level?
4. What is the output gap?
5. In the long-run the economy adjusts to the long-run equilibrium point. What is long-run equilibrium GDP level?