🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
HomeClass Notes1,200,000CA670,000

ECON321 Lecture Notes - Lecture 14: Econometrics, Negative Number, Confidence Interval

19 views8 pages
blueraven607
5 Dec 2014
School
University of Waterloo
Department
Economics
Course
ECON321
Professor
Kathleen Rybczynski

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Once we have our hypotheses formed, and our t-statistics and p-values calculated, we must decide whether or not our hypothesis is reasonable. Level of significance the probability level at which we feel comfortable rejecting the null. Critical value given our chosen level of significance, the critical value is that value, above which, the probability of a t-stat occuring is equal to . The critical value is denoted by c. ex/ suppose we choose =5% as our level of significance. For a one sided test ( h0: j 0, h1: j 0 ), the critical value is such that: =p t j. When t j >c, the probability of this t-stat occuring by chance is less than our chosen significance level 5%, so we reject the null hypothesis. When t j

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

ECON321 Lecture Notes - Lecture 9: Econometrics, Regression Analysis
blueraven607
ECON321 Lecture Notes - Lecture 18: F-Distribution, Tachykinin Receptor 1, Homoscedasticity
blueraven607
ECON321 Lecture Notes - Lecture 16: Econometrics, Test Statistic, Chow Test
blueraven607

Related Questions

Discuss why we need to be concerned with the value of something we did not choose, as opposed to simply stating the value of the item we want to pick.

Example:

One of the key concepts in economics is an opportunity cost, which simply put, is the value we place on our second choice. That is when presented with a number of choices, describe the value of the one we pick in terms of the value we place on our next best choice. This definition may seem odd to you, given that we don't pick our second choice. For example, if I decide to go out for pizza, that means I did not go out for a hamburger (which would have been my second choice). In business, an opportunity cost is a lost opportunity when we make a choice; managers need to ensure they are making the choice that yields the highest return in order to maximize profit.

We recently added the STARZ Network to our premium cable tier. Currently, 852 of our basic service subscribers purchase this service at our current price of $10.50 per month. As you know, our current contributions from STARZ are not as high as we expected. I would like you to evaluate our current price to see if we might be able to raise or lower it to enhance the contributions of STARZ to our revenues and ultimately profits. Hint: Estimate the demand curve from the attached price and quantity data to get the slope and find the price elasticity of demand for the current price and quantity, and tell me, using the optimal pricing formula (actual markup versus optimal markup), if we should increase or decrease prices. In the abovementioned earlier study of the feasibility of adding STARZ, the marketing department obtained the attached data on the demand and costs for this channel in our Region 1 service area. In addition to the fixed administrative costs, there is a variable cost (license fee) of $5.49 per customer. Please use these data to provide your recommendation about whether we should increase or decrease prices (from the $10.50 we are charging now) to increase total profits. (Hint: Calculate the total costs, total revenue and provide the profits for all prices. Find the profit maximizing price, and tell me how much our profits will increase if we move to the profit maximizing price)

Price Subscribers Other Costs
$5.00 1493 $1,200.00
$5.50 1500 $1,200.00
$6.00 1350 $1,200.00
$6.50 1224 $1,200.00
$7.00 1220 $1,200.00
$7.50 1210 $1,200.00
$8.00 1205 $1,200.00
$8.50 1212 $1,200.00
$9.00 1234 $1,200.00
$9.50 1104 $1,200.00
$10.00 936 $1,200.00
$10.50 887 $1,200.00
$11.00 843 $1,200.00
$11.50 823 $1,200.00
$12.00 750 $1,200.00
$12.50 648 $1,200.00
$13.00 488 $1,200.00
$13.50 249 $1,200.00
$14.00 249 $1,200.00
$14.50 203 $1,200.00
$15.00 178 $1,200.00

Death and taxes are two things that are said to be impossible to escape. Since taxation is necessary to fund our government and we depend on the services provided by our government (we all benefit from our military and homeland security, this is not a place to argue about no need for government) what would be a fair system, rate schedule or method of taxation on a federal level? Try to base your argument on economic thought (accepted principals).