1. What is "household production" and how is its value measured?

2. Describe in detail the long-run trends in the value of U.S. household production?

3. If the value of household production were included in GDP, how would this change the growth patterns of U.S. GDP over time?

The interest rate on a 1-year Canadian security is	12%
current exchange rate is C$ = US	0.8
1-year forward rate is C$ = US	0.82
The return (denominated in U.S. $) that a U.S. investor can earn by investing in the Canadian security is

		12.00%
		13.24%
		14.18%
		14.80%

Viet Catfish Case

Sixteen years after the end of the

Vietnam war, the United States and

Vietnam signed a free trade agreement.

In December 2001, Vietnam

agreed to lower import tariffs and

restrictions on U.S. investments in

that nation. In return, the U.S.

agreed to dismantle discriminatory

trade barriers on Vietnamese

exports.

The trade pact was an instant

success. Vietnamese exports to

the U.S. more than doubled in the

first year after the trade pact was

signed, led by exports of textiles,

seafood, shoes, furniture, and

commodities. U.S. investments

in Vietnam also surged.

Catfish farmers in the

Mississippi Delta weren’t happy

about this surge in Viet-U.S. trade.

In fact, they were downright angr y.

For well over a decade, catfish

farmers in Mississippi, Arkansas,

and Louisiana had been struggling

to preserve their profits. As

reported in Chapter 23 of The

Economy Today (Chapter 8 in

The Micro Economy Today) low

entry barriers kept persistent

pressure on prices and profits.

The early entrepreneurs in the

industry had to contend with a

stream of cotton farmers who

sought higher returns in catfish

farming. Despite an impressive

rise in market demand, prices

and profits stayed low as the

industry expanded.

Surging Imports

The Viet-U.S. pact intensified competitive

pressures on Delta catfish

farmers. In 1998, only 575,000

pounds of Vietnamese catfish were

imported into the United States,

mostly in the form of frozen fillets.

Viet imports surged to 20 million

pounds in 2001 and jumped again

to 34 million pounds last year.

That was more competition than

domestic catfish farmers could

bear. The price of frozen fillets fell

by 15 percent in 2001, to a low of

62 cents a pound. Prices kept

falling in 2002, hitting a low of 53

cents a pound at years end. With

average production costs of 65

cents a pound, U.S. catfish farmers

were incurring substantial economic

losses. Suddenly, cotton farming

started looking better again.

Comparative Advantage

Shifting domestic resources from

catfish farming back to cotton

farming is consistent with the

principle of comparative advantage.

Most farm-raised U.S. catfish

are grown in clay-lined ponds filled

with purified waters from underground

wells. The fish are fed

pellets containing soybeans and

corn and are subject to regular

USDA health inspections.

Vietnamese catfish, by contrast,

are grown in giant holding pens

suspended under the free-flowing

Mekong river and other waterways.

The Vietnamese production process is

much less expensive, giving Vietnam’s

catfish farmers an absolute advantage

over U.S. farmers. Given the relatively

high costs of cotton farming in

Vietnam, the Vietnamese also have

a decided comparative advantage in

catfish farming. Because of this, both

the U.S. and Vietnam could enjoy

more output if the U.S. specialized

in cotton farming and Vietnam

specialized in catfish farming. That

is exactly the kind of resource

reallocation the surging Vietnamese

catfish exports was causing.

Trade Resistance

The 13,000 workers in the U.S.

catfish industry don’t want to hear

about comparative advantage.

They simply want to keep their jobs.

And their employers want to regain

economic profits. They aren’t willing

to sacrifice their own well-being for

the sake of cheaper fish and so-called

gains from trade.

Economic theory may not be on

the side of the domestic catfish

industry, but U.S. politicians

certainly are. At the urging of Trent

Lott, the Senate majority leader

from Mississippi, the U.S. Congress

decided that of the 2,000 or so

varieties of catfish, only the North

American channel variety of catfish

could be labeled as “catfish.”

Vietnamese catfish had to be labeled

as “basa” or “tra,” as in

the Vietnamese language.

To further discourage consumption

of imports, the Catfish Farmers of

America, an industry lobbying group,

ran advertisements warning American

consumers that “basa” and “tra” “float

a round in Third World rivers nibbling on

who knows what.” Arkansas

C o n g ressman Marion Berry warned that

Viet fish might even be contaminated by

Agent orange-- a defoliant sprayed over

the Vietnamese countryside by U.S.

f o rces during the Vietnam war. None of

these nontariff barriers halted the influx

of Viet catfish however.

Dumping Charges

U.S. catfish farmers decided to mount

a more direct attack on Viet catfish. The

Catfish Farmers of America filed a complaint

with the U.S. Department of

C o m m e rce, charging Vietnam of “dumping”

catfish on U.S. markets. Dumping

occurs when foreign producers sell their

p roducts abroad for less than the costs

of producing them or less than prices

in their own market.

On its face, the complaint seemed to

have no merit. Export prices were no

lower than domestic prices in Vi e t n a m .

Plus, Vietnamese farmers were evidently

e a rning economic profits. Hence, neither

form of dumping seemed plausible.

The Department of Commerce found a

loophole to resolve this contradiction.

C o m m e rce officials decided that

Vietnam was still not a “market econom

y.” As a “nonmarket economy” its

prices could not be regarded as re l i a b l e

indices of underlying costs. Instead, the

U.S. Department of Commerce would

have to independently assess the “true ”

costs of Vietnamese catfish production.

To determine the “true” costs of

Vietnamese catfish farming, U.S.

investigators went to Bangladesh!

Bangladesh is widely regarded as a

market economy, with a level of

development similar to Vi e t n a m ’s.

So Bangladesh prices were assigned

to Vietnamese farmers. With no fully

integrated firms and fewer natural

resource advantages, Bangladesh

ended up with hypothetical costs in

excess of Vietnamese prices. With this

“evidence” in hand, the Commerce

Department concluded in January 2003

that Vietnamese catfish were indeed

being dumped on U.S. markets.

Anti-Dumping Duties

To “level the playing field,” the

U.S. Commerce Department leveled

temporary import duties (tariffs) of

37-64 percent. Importers of Viet

catfish had to deposit these duties

into an escrow account until the

U.S. International Trade Commission

(ITC) reviewed the case. The ITC

must not only affirm the practice of

dumping, but must also determine

that U.S. catfish farmers have been

materially damaged by such unfair

foreign competition. If the ITC so

rules, then the duties become

permanent and payable. If the ITC

rejects the dumping or damage

charges, the duties are rescinded

and the escrowed payments are

refunded. The odds are never

good for foreign producers: The

Commerce department ruled in

favor of domestic producers 91

percent of the time and the ITC

concurred 80 percent of the time.

The catfish case was similarly

decided: on July 23 of this year

the ITC unanimously ruled that

Viet catfish had injured U.S.

catfish farmers. The temporary

duties of 37-64 percent were

made permanent and retroactive

to January.

With your knowledge of comparative advantage and international trade – explain who were the winners and losers and why in this Catfish Case? Use economic terms and concepts to expain and support your answer. (5 points)

This article illustrates the political economy of international trade and the concept of comparative advantage. Explain Who are the "Winners" and "Losers" and why as described in this article and the effect of "arbitrary government intervention" that circumvents the workings of free trade initiated by Senator Trent Lott as described in the article? Use the economic concept of comparative advantage in your explanation. (5 points). Viet Catfish Case Sixteen years after the end of the Vietnam war, the United States and Vietnam signed a free trade agreement. In December 2001, Vietnam agreed to lower import tariffs and restrictions on U.S. investments in that nation. In return, the U.S. agreed to dismantle discriminatory trade barriers on Vietnamese exports. The trade pact was an instant success. Vietnamese exports to the U.S. more than doubled in the first year after the trade pact was signed, led by exports of textiles, seafood, shoes, furniture, and commodities. U.S. investments in Vietnam also surged. Catfish farmers in the Mississippi Delta weren’t happy about this surge in Viet-U.S. trade. In fact, they were downright angr y. For well over a decade, catfish farmers in Mississippi, Arkansas, and Louisiana had been struggling to preserve their profits. As reported in Chapter 23 of The Economy Today (Chapter 8 in The Micro Economy Today) low entry barriers kept persistent pressure on prices and profits. The early entrepreneurs in the industry had to contend with a stream of cotton farmers who sought higher returns in catfish farming. Despite an impressive rise in market demand, prices and profits stayed low as the industry expanded. Surging Imports The Viet-U.S. pact intensified competitive pressures on Delta catfish farmers. In 1998, only 575,000 pounds of Vietnamese catfish were imported into the United States, mostly in the form of frozen fillets. Viet imports surged to 20 million pounds in 2001 and jumped again to 34 million pounds last year. That was more competition than domestic catfish farmers could bear. The price of frozen fillets fell by 15 percent in 2001, to a low of 62 cents a pound. Prices kept falling in 2002, hitting a low of 53 cents a pound at years end. With average production costs of 65 cents a pound, U.S. catfish farmers were incurring substantial economic losses. Suddenly, cotton farming started looking better again. Comparative Advantage Shifting domestic resources from catfish farming back to cotton farming is consistent with the principle of comparative advantage. Most farm-raised U.S. catfish are grown in clay-lined ponds filled with purified waters from underground wells. The fish are fed pellets containing soybeans and corn and are subject to regular USDA health inspections. Vietnamese catfish, by contrast, are grown in giant holding pens suspended under the free-flowing Mekong river and other waterways. The Vietnamese production process is much less expensive, giving Vietnam’s catfish farmers an absolute advantage over U.S. farmers. Given the relatively high costs of cotton farming in Vietnam, the Vietnamese also have a decided comparative advantage in catfish farming. Because of this, both the U.S. and Vietnam could enjoy more output if the U.S. specialized in cotton farming and Vietnam specialized in catfish farming. That is exactly the kind of resource reallocation the surging Vietnamese catfish exports was causing. Trade Resistance The 13,000 workers in the U.S. catfish industry don’t want to hear about comparative advantage. They simply want to keep their jobs. And their employers want to regain economic profits. They aren’t willing to sacrifice their own well-being for the sake of cheaper fish and so-called gains from trade. Economic theory may not be on the side of the domestic catfish industry, but U.S. politicians certainly are. At the urging of Trent Lott, the Senate majority leader from Mississippi, the U.S. Congress decided that of the 2,000 or so varieties of catfish, only the North American channel variety of catfish could be labeled as “catfish.” Vietnamese catfish had to be labeled as “basa” or “tra,” as in the Vietnamese language. To further discourage consumption of imports, the Catfish Farmers of America, an industry lobbying group, ran advertisements warning American consumers that “basa” and “tra” “float a round in Third World rivers nibbling on who knows what.” Arkansas C o n g ressman Marion Berry warned that Viet fish might even be contaminated by Agent orange-- a defoliant sprayed over the Vietnamese countryside by U.S. f o rces during the Vietnam war. None of these nontariff barriers halted the influx of Viet catfish however. Dumping Charges U.S. catfish farmers decided to mount a more direct attack on Viet catfish. The Catfish Farmers of America filed a complaint with the U.S. Department of C o m m e rce, charging Vietnam of “dumping” catfish on U.S. markets. Dumping occurs when foreign producers sell their p roducts abroad for less than the costs of producing them or less than prices in their own market. On its face, the complaint seemed to have no merit. Export prices were no lower than domestic prices in Vi e t n a m . Plus, Vietnamese farmers were evidently e a rning economic profits. Hence, neither form of dumping seemed plausible. The Department of Commerce found a loophole to resolve this contradiction. C o m m e rce officials decided that Vietnam was still not a “market econom y.” As a “nonmarket economy” its prices could not be regarded as re l i a b l e indices of underlying costs. Instead, the U.S. Department of Commerce would have to independently assess the “true ” costs of Vietnamese catfish production. To determine the “true” costs of Vietnamese catfish farming, U.S. investigators went to Bangladesh! Bangladesh is widely regarded as a market economy, with a level of development similar to Vi e t n a m ’s. So Bangladesh prices were assigned to Vietnamese farmers. With no fully integrated firms and fewer natural resource advantages, Bangladesh ended up with hypothetical costs in excess of Vietnamese prices. With this “evidence” in hand, the Commerce Department concluded in January 2003 that Vietnamese catfish were indeed being dumped on U.S. markets. Anti-Dumping Duties To “level the playing field,” the U.S. Commerce Department leveled temporary import duties (tariffs) of 37-64 percent. Importers of Viet catfish had to deposit these duties into an escrow account until the U.S. International Trade Commission (ITC) reviewed the case. The ITC must not only affirm the practice of dumping, but must also determine that U.S. catfish farmers have been materially damaged by such unfair foreign competition. If the ITC so rules, then the duties become permanent and payable. If the ITC rejects the dumping or damage charges, the duties are rescinded and the escrowed payments are refunded. The odds are never good for foreign producers: The Commerce department ruled in favor of domestic producers 91 percent of the time and the ITC concurred 80 percent of the time. The catfish case was similarly decided: on July 23 of this year the ITC unanimously ruled that Viet catfish had injured U.S. catfish farmers. The temporary duties of 37-64 percent were made permanent and retroactive to January. With your knowledge of comparative advantage and international trade – explain who were the winners and losers and why in this Catfish Case? Use economic terms and concepts to explain and support your answer. (5points)

Case Study Eagersaver.com Eagersaver.com was established in 2005 by the CEO Colette Bevan as an online comparison site primarily focused on car insurance and related products. Since then it has grown, both organically and by acquisition of other companies into an organisation that now compares home insurance, legal insurance, pet insurance, travel insurance, life insurance and accident insurance. It has diversified into other comparison services in financial products, travel services and utilities. It has moved offline with the opening of call centre activities and a TV shopping channel. The company’s turnover is £100m. The Managing Director Dirk Bradfield now wishes to float the company on the stock exchange and following a due diligence exercise by Colette’s corporate advisors she has been advised to ‘professionalise the procurement activities throughout the group.’ The due diligence uncovered the following facts: • There are five locations within the UK, situated at Chester, Edinburgh, Sheffield, Bristol and Cardiff. They work independently and only one location has a Purchasing Manager (TV shopping channel). • The largest spend across the group is on marketing (£12m online and £8m TV). • Marketing is centrally managed by the Marketing Director. • Most other procurement is undertaken by service heads including IT and agency staff. • Numerous media companies are engaged often without competition. • The same or similar products and services are procured from different suppliers. • There is a range of prices paid for the same product or service, some ranging by ±30%. • Most contracts are under the vendor’s terms and conditions and in some cases there are verbal arrangements. • The company has outgrown many of its original supplier’s who are finding it difficult to cope with demand and there are instances where contract performance has slipped. • The Chief Executive is responsible for many of these problematic relationships based upon personal friendship at the inception of the company. Tasks You have been appointed into the new position of Group Procurement Director and have a meeting arranged with Colette to discuss the way forward. In considering your plan, how specifically would you deal with?

1. Structuring the procurement activities

2. Rationalising the product and supply chain

3. Managing the Marketing Director who states corporate expenditure is his budget and he will decide who has the last say on contract awards

4. Managing the expenditure attributed to other Service Heads.

14. A CFO and CEO potentially are subject to huge financial penalties if they incorrectly certify to the SEC that their company’s internal controls function properly, and they do not. They similarly are subject to huge penalties if they certify that their company’s financial statements fairly present its financial position, but they do not. Should these executives be allowed to obtain insurance that will reimburse them for the amount of these penalties if they mistakenly submit a certification to the SEC that proves to be erroneous? Identify the pros and cons of insurance coverage being available.

Question 1A A CEO of a multihospital system is planning to expand operations into various states. It will take several years to get certificate of need (CON) approvals so that the new facilities can be constructed. The eventual cost (in millions of dollars) of building a facility will differ among states, depending upon finances, labor, and the economic and political climate. An outside consulting firm estimated the costs for the new facilities as based on declining, similar, or improving economies, and the associated probabilities as shown in the Table below. Decision alternatives Declining Same Improving Kentucky 22.00 19.00 15.00 Maryland 19.00 18.50 18.00 North carolina 19.50 17.00 15.50 Tennesee 23.00 17.00 14.00 Virginia 25.00 21.00 13.00 (a) Which alternative should the firm choose under the maximax criterion? (1 mark) (b) Which option should the firm choose under the maximin criterion? (1 mark) (c) Which option should the firm choose under the LaPlace criterion? (d) Which option should the firm choose with the Hurwicz criterion with α = 0.4? (e) Using a minimax regret approach, what alternative should the firm choose? (f) Economists have assigned probabilities of 0.25, 0.40, and 0.35 to the possible economic climate of declining, same and improving respectively. Using expected monetary values, what option should be chosen and what is that optimal expected value? (g) What is the most that the firm should be willing to pay for additional information? Use Expected Regret (h) Use the alternative method to verify EVPI Question 1B Assume now that the pay offs are profits answer the following: (a) Using an optimistic approach (maximax), which option would you choose? 1 mark (b) Using a pessimistic approach (maximin), which option would you choose?1 mark (c) If you are a LaPlace decision maker, which option would you choose? 2 marks (d) If you are a Hurwicz decision maker, which option would you choose with α = 0.4?1 mark (e) Using a minimax regret approach, which option would you choose? 4 marks (f) Using the same probabilities of 0.25, 0.4, and 0.35 for possible economic climates respectively, which decision alternative will maximise the expected profit? What is the expected annual profit associated with that recommendation? 4 marks g) What is the most the firm should be willing to pay to obtain further (perfect) information (EVPI)? 3 marks h) Use the alternative method to verify EVPI (3 marks

We are interested in the relationship between the compensation of Chief Executive Officers (CEO) of firms and the return on equity of their respective firm, using the dataset salary.xlsx. The variable salary shows the annual salary of a CEO in thousands of dollars, so that y = 150 indicates a salary of $150,000. Similarly, the variable ROE represents the average return on equity (ROE)for the CEO’s firm for the previous three years. A ROE of 20 indicates an average return of 20%.

1. Draw a boxplot and a histogram of the salary of CEO. Are there any apparent outliers in the data? Are there high leverage points?

2. Use your software to estimate the relationship and report your results.

   ??????? = ?0 + ?1???? + ??

3. Looking at a plot of the residuals against predicted values and at the normal probability plot of residuals, does the estimated model appear satisfactory?

4. Use your software to estimate the model, this time by using the database salaryalt.xlsx which excludes all the data points for which the salary of the CEO appears extraordinarily large considering the ROE of their firm. Report your results.

5. Produce a histogram and a normal probability plot of the residuals of this regression. Does this regression appear to meet the conditions of absence of outliers and near normality?

6. What are the units of the slope coefficient b1 in this equation? What is the impact on the salary of the CEO of firm i if the ROE increases by 1%?

7. Use your results to calculate a 95% interval to estimate the mean salary of CEOs whose firms have an ROE of 20 per cent.

obs	salary	roe
1	1095	14.1
2	1001	10.9
3	1122	23.5
4	578	5.9
5	1368	13.8
6	1145	20
7	1078	16.4
8	1094	16.3
9	1237	10.5
10	833	26.3
11	567	25.9
12	933	26.8
13	1339	14.8
14	937	22.3
15	2011	56.3
16	1585	12.6
17	905	20.4
18	1058	1.9
19	922	19.9
20	1220	15.4
21	1022	38.7
22	759	16.4
23	1414	24.4
24	1041	15.6
25	1688	14.4
26	2983	19
27	1160	16.1
28	3844	12.1
29	476	16.2
30	1492	18.4
31	1024	14.2
32	1593	14.9
33	427	12.4
34	829	17.1
35	797	16.9
36	577	18.1
37	1342	10.9
38	1774	19.3
39	709	18.3
40	860	18.4
41	1336	13.8
42	516	13.7
43	931	12.7
44	815	15.1
45	1681	16.5
46	568	10.2
47	775	19.6
48	1188	12.8
49	782	15.9
50	1170	17.3
51	1469	8.5
52	916	16.4
53	1070	19.5
54	894	19.2
55	829	15.9
56	780	19.9
57	2327	28.1
58	717	25
59	1368	15
60	2028	12.6
61	1195	20.3
62	256	22.7
63	775	14.8
64	1407	13.2
65	543	10.3
66	874	17.7
67	1287	10
68	1248	15.6
69	875	6.8
70	925	12.4
71	798	13.1
72	760	15.8
73	600	12.8
74	991	15.3
75	1570	0.5
76	911	16.5
77	1360	15.1
78	700	13
79	741	11.1
80	1097	8.9
81	953	17.5
82	441	15.9
83	595	14.2
84	1067	9.3
85	1298	9.5
86	1798	15.5
87	4143	14.4
88	1336	11.1
89	1750	15.9
90	912	16.4
91	1892	8.6
92	833	24.6
93	1142	15.4
94	1159	16.9
95	1283	7.2
96	2109	11.6
97	1039	26.4
98	992	21.4
99	1253	19.2
100	721	15.1
101	1351	9
102	1391	9.4
103	1245	19
104	1550	3.5
105	2150	22.1
106	1846	10.9
107	573	15.1
108	6640	10.2
109	959	17.3
110	612	33.3
111	1820	22.8
112	1411	11.1
113	1026	12.4
114	1287	20.9
115	800	6.7
116	1115	7.1
117	1631	11.8
118	1910	14
119	996	10.1
120	918	6.4
121	1261	12.4
122	1053	17.6
123	1221	15.1
124	1738	23.6
125	3142	35.7
126	1900	23.2
127	427	12.4
128	1700	44.4
129	360	2.1
130	459	18.4
131	1340	16.1
132	729	15.1
133	223	22.7
134	2101	23.4
135	1082	25.7
136	1781	27
137	791	19.9
138	2092	43.7
139	1573	16.4
140	1045	11.6
141	1694	24.8
142	453	26.2
143	1130	44.5
144	1334	22.3
145	1344	22.3
146	1585	35.1
147	1946	13.1
148	1619	11
149	1620	19.4
150	967	28.5
151	1431	43.9
152	1231	26.8
153	770	15.7
154	1594	15
155	1568	28.2
156	995	15.4
157	1077	20
158	1161	42.2
159	1401	19.6
160	1127	16.2
161	3068	21.5
162	730	29.5
163	729	22.6
164	11233	22.9
165	949	13
166	3646	7.8
167	1502	48.1
168	807	18
169	713	18
170	1489	21.7
171	736	21.3
172	1226	26.9
173	543	30.5
174	14822	19.4
175	890	15.6
176	1627	19.4
177	2408	29.1
178	2248	40.8
179	787	13.7
180	474	11.1
181	439	10.8
182	465	5.1
183	594	12.3
184	688	7.4
185	607	6.2
186	634	12.7
187	532	10.6
188	441	7.4
189	694	12.6
190	520	12.8
191	757	2.9
192	668	13.5
193	803	10.7
194	500	11.9
195	552	12.9
196	412	10.1
197	1100	7.3
198	959	14.6
199	333	13.8
200	503	8.9
201	448	14
202	732	12.9
203	720	14.5
204	808	14.7
205	930	9
206	525	15.5
207	658	12.1
208	555	13.7
209	626	14.4

We are interested in the relationship between the compensation of Chief Executive Officers (CEO) of firms and the return on equity of their respective firm, using the dataset below. The variable salary shows the annual salary of a CEO in thousands of dollars, so that y = 150 indicates a salary of $150,000. Similarly, the variable ROE represents the average return on equity (ROE)for the CEO’s firm for the previous three years. A ROE of 20 indicates an average return of 20%.

obs	salary	roe
1	1095	14.1
2	1001	10.9
3	1122	23.5
4	578	5.9
5	1368	13.8
6	1145	20
7	1078	16.4
8	1094	16.3
9	1237	10.5
10	833	26.3
11	567	25.9
12	933	26.8
13	1339	14.8
14	937	22.3
15	2011	56.3
16	1585	12.6
17	905	20.4
18	1058	1.9
19	922	19.9
20	1220	15.4
21	1022	38.7
22	759	16.4
23	1414	24.4
24	1041	15.6
25	1688	14.4
26	2983	19
27	1160	16.1
28	3844	12.1
29	476	16.2
30	1492	18.4
31	1024	14.2
32	1593	14.9
33	427	12.4
34	829	17.1
35	797	16.9
36	577	18.1
37	1342	10.9
38	1774	19.3
39	709	18.3
40	860	18.4
41	1336	13.8
42	516	13.7
43	931	12.7
44	815	15.1
45	1681	16.5
46	568	10.2
47	775	19.6
48	1188	12.8
49	782	15.9
50	1170	17.3
51	1469	8.5
52	916	16.4
53	1070	19.5
54	894	19.2
55	829	15.9
56	780	19.9
57	2327	28.1
58	717	25
59	1368	15
60	2028	12.6
61	1195	20.3
62	256	22.7
63	775	14.8
64	1407	13.2
65	543	10.3
66	874	17.7
67	1287	10
68	1248	15.6
69	875	6.8
70	925	12.4
71	798	13.1
72	760	15.8
73	600	12.8
74	991	15.3
75	1570	0.5
76	911	16.5
77	1360	15.1
78	700	13
79	741	11.1
80	1097	8.9
81	953	17.5
82	441	15.9
83	595	14.2
84	1067	9.3
85	1298	9.5
86	1798	15.5
87	4143	14.4
88	1336	11.1
89	1750	15.9
90	912	16.4
91	1892	8.6
92	833	24.6
93	1142	15.4
94	1159	16.9
95	1283	7.2
96	2109	11.6
97	1039	26.4
98	992	21.4
99	1253	19.2
100	721	15.1
101	1351	9
102	1391	9.4
103	1245	19
104	1550	3.5
105	2150	22.1
106	1846	10.9
107	573	15.1
108	6640	10.2
109	959	17.3
110	612	33.3
111	1820	22.8
112	1411	11.1
113	1026	12.4
114	1287	20.9
115	800	6.7
116	1115	7.1
117	1631	11.8
118	1910	14
119	996	10.1
120	918	6.4
121	1261	12.4
122	1053	17.6
123	1221	15.1
124	1738	23.6
125	3142	35.7
126	1900	23.2
127	427	12.4
128	1700	44.4
129	360	2.1
130	459	18.4
131	1340	16.1
132	729	15.1
133	223	22.7
134	2101	23.4
135	1082	25.7
136	1781	27
137	791	19.9
138	2092	43.7
139	1573	16.4
140	1045	11.6
141	1694	24.8
142	453	26.2
143	1130	44.5
144	1334	22.3
145	1344	22.3
146	1585	35.1
147	1946	13.1
148	1619	11
149	1620	19.4
150	967	28.5
151	1431	43.9
152	1231	26.8
153	770	15.7
154	1594	15
155	1568	28.2
156	995	15.4
157	1077	20
158	1161	42.2
159	1401	19.6
160	1127	16.2
161	3068	21.5
162	730	29.5
163	729	22.6
164	11233	22.9
165	949	13
166	3646	7.8
167	1502	48.1
168	807	18
169	713	18
170	1489	21.7
171	736	21.3
172	1226	26.9
173	543	30.5
174	14822	19.4
175	890	15.6
176	1627	19.4
177	2408	29.1
178	2248	40.8
179	787	13.7
180	474	11.1
181	439	10.8
182	465	5.1
183	594	12.3
184	688	7.4
185	607	6.2
186	634	12.7
187	532	10.6
188	441	7.4
189	694	12.6
190	520	12.8
191	757	2.9
192	668	13.5
193	803	10.7
194	500	11.9
195	552	12.9
196	412	10.1
197	1100	7.3
198	959	14.6
199	333	13.8
200	503	8.9
201	448	14
202	732	12.9
203	720	14.5
204	808	14.7
205	930	9
206	525	15.5
207	658	12.1
208	555	13.7
209	626	14.4

a) Draw a boxplot and a histogram of the salary of CEO. Are there any apparent outliers in the data? Are there high leverage points?

b) Use your software to estimate the relationship and report your results.

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c) Looking at a plot of the residuals against predicted values and at the normal probability plot of residuals, does the estimated model appear satisfactory?