In the hedonic model, what is the alternative hypothesis? The price impact is 0 There is a positive price impact There is a negative price impact The price impact is not equal to 0
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In the hedonic model, what is the alternative hypothesis?
The price impact is 0
There is a positive price impact
There is a negative price impact
The price impact is not equal to 0
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Solved in 4 steps
- Are predictions using the supply-and-demand model likely to be reliable in each of the following markets ? a) Apples b) Convenience storesc) Electronic games ( a market dominated by a few firms)d) Used carsThe Atlas Movies Theater is planning to reprice their ticket rates to maximize revenues. They have three classes of tickets: Classic, Silver, and Gold. The accompanying table provides information on the average ticket sales, revenue and price elasticity on demand. They have a total seating capacity of 300. The table also provides the price range within which they plan to reduce their ticket rates. According to the nonlinear model, which of the following is the projected revenue figure for Silver tickets based on its new price? Click the icon to view the ticketing model. OA. $1,224.63 B. $1,132.08 C. $1,163.02 D. $1,316.92 Ticketing Model Atlas Movie Theater Ticketing Data Ticket Class Classic Silver Gold ... Current Average Elasticity Total Rate Daily Seating Sold Capacity $8.45 $13.25 80 $17.50 30 150 Print -1.5 -2 -1 Done 300 Price Range $6.50 $7.50 $11.50 $12.50 $15.50 $16.50 1 XAccording to the reading "Gasoline Consumption in the US and Norway", the estimate for the long- run price elasticity of demand was Ed=1.44. We also know that there is better access to public transportation in Norway than in the US. So, this estimate likely the true long-run price elasticity of demand for gasoline. In other words, if the public transit system in Norway was the same as in the US, a 1% increase in the price of gas would reduce the quantity demanded in the long-run by. than 1.44%. (Fill in the blanks.) O Overstates, more. Overstates, less. Overstates, more. O Understates, less.
- Which of the following methods could potentially be used to estimate a price elasticity? a) aggregate responses to a survey question about willingness to pay to get the demand curve, then estimate the price elasticity b) Fit a regression model to historical data and use the coefficients to calculate the price elasticity c) Fit a logistic regression model to conjoint data and use the coefficients to calculate the price elasticity d) all of the above e) both A & CAll questions utilize the multivariate demand function for Smooth Sailing sailboats in C6 on text page 83, initially with: PX = $9500 PY = $10000 I = $15000 A = $170000 W = 160 This function is: Qs = 89830 -40PS +20PX +15PY +2I +.001A +10W Where Qs=quantity purchased Ps= the price of Smooth Sailing sailboats Px= the price of company X’s sailboat Py= the price of company’s Y’s motorboat I= per capita income in dollars A= dollars spent on advertising W=number of favorable days of weather in the southern region of the United States Use the above to calculate the arc price elasticity of demand between PS = $5000 and PS = $4000. The arc elasticity formula is: Calculate the quantity demanded at each of the above prices and revenue that will result if the quantity is sold (fill in table below). PS QS Revenue…The Sydney Transportation Company operates an urban bus system in New South Wales, Australia. Economic analysis performed by the firm indicates that two major factors influence the demand for its services: fare levels and downtown parking rates. Table 1 presents information available from 2005 operations. Forecasts of future fares and hourly parking rates are presented in Table 2.Sydney’s economists supplied the following information so that the firm can estimate ridership. Based on past experience, the coefficient of cross elasticity between bus ridership and downtown parking rates is estimated at 0.2, given a fare of $1.00 per round trip. This is not expected to change for a fare increase to $1.25. The price elasticity of demand is currently estimated at −1.1, given hourly parking rates of $1.50. It is estimated, however, that the price elasticity will change to −1.2 when parking rates increase to $2.50. Using these data, estimate the average daily ridership for 2006 and 2007.
- Alter the desmos.com model using the following daily market demand and supply of burritos: P = 6.37 0.025 Q and P = 1.2 + 0.016 Q 8 7 6 5 4 3 2 1 50 100 150 200 250 30 To find the number of burritos that are supplied by firms and demanded consumers, you solve demand equal to supply (6.37 0.025 Q = 1.2 + 0.016 Q) for Q or use your Desmos model. It equals burritos. To find the market-clearing price, substitute his value into demand or supply or use your Desmos model. It is dollars per burrito. Regarding the first burrito supplied, the • maximum price the first consumer is willing to pay is • minimum price firms are willing to accept is • price that is paid for it is dollars • first consumer surplus is dollars dollars dollarsThe monthly supply of desktop personal computers is given by the equation QS = 15,000 + 43.75P. At a price of $800, what is the price elasticity of supply? B) The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special": QD = 1,200,000 - 40PEssay 3 - 20 points As the manager of a local hotel chain, you have hired an econometrician to estimate the demand for one of your hotels (H). The estimation has resulted in the following demand function: QH - 2.25PSE + 0.8POH + 0.01M, where PH is the price of a room at your hotel, Pc is the price of concerts in your area, Pse is the price of sporting events in your area, PoH is the average room price at other hotels in your area, and M is the average income in the United States. What would be the impact on your firm of: a. A $500 increase in income? b. A $10 reduction in the price charged by other hotels? c. A $7 increase in the price of tickets to local sporting events? d. A $5 increase in the price of concert tickets, accompanied by an $8 increase in income? 2,000 – PH- 1.5Pc %3D -
- The demand function for good X is ln Qdx= a + b ln Px + c ln M + e, where Px is the price of good X and M is income. Least squares regression reveals that â = 7.42, b ˆ = −2.18, and ĉ = 0.34. a. If M = 55,000 and Px = 4.39, compute the own price elasticity of demand based on these estimates. Determine whether demand is elastic or inelastic. b. If M = 55,000 and Px = 4.39, compute the income elasticity of demand based on these estimates. Determine whether X is a normal or inferior good.Apparel manufacturer Nike produces high-end and low-end versions of their running shirts. They estimate that the demands for their products are given by: High-end shirts: P = 130 - 2QH , andLow-end shirts: P = 80 - QL, where Q is measured in 1000 shirts, "H" denotes High-end and "L" denotes Low-end Both types of shirts are produced on the same production line in the same facility, so the marginal cost of producing and selling both types of shirts is constant at $30. Supposing that (i) the two demands are independent and (ii) Nike can produce and market the shirts such that the high- and low-end markets are successfully segmented, what are the profit-maximizing prices Nike would charge for each version?Answer Options:a) by the midpoint rule, PH = $65 and Pl = $40b) PH = $80 and PL = $55c) Nike will set price equal to marginal cost for both versionsd) PH = $130 and PL = $80For the demand function = 200 − 3? , calculate the arc price elasticity for a change in price from ? = 50 to ? = 45.