ECO325H1 Lecture 7: Lecture 7 Ramsey-Cass-Koopman
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The American Hospital Association recommends that all providers use the following definitions when describing a patientâs condition: fair, serious, and critical. Costs for 15 patients admitted by Forest Lake Hospital of Madrid are listed below:
Patient | Cost $ | D1 (1 if critical, 0 if not) | D2 (1 if serious, 0 if not) |
1 | 17,200 | 1 | 0 |
2 | 11,100 | 1 | 0 |
3 | 12,000 | 1 | 0 |
4 | 10,900 | 1 | 0 |
5 | 13,800 | 1 | 0 |
6 | 6,500 | 0 | 1 |
7 | 10,000 | 0 | 1 |
8 | 11,500 | 0 | 1 |
9 | 7,000 | 0 | 1 |
10 | 8,500 | 0 | 1 |
11 | 2,100 | 0 | 0 |
12 | 1,300 | 0 | 0 |
13 | 3,400 | 0 | 0 |
14 | 7,500 | 0 | 0 |
15 | 2,000 | 0 | 0 |
1. Write a linear regression model relating cost to patient condition.
2. Interpret the slopes of the à coefficients.
3. Are the difference between the means statistically different? Please explain.
Look at the dataset below:
Q | P | Revenue | MR | Elasticity | ||
0 | 12 | 0 |
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1 | 10 | 10 |
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2 | 8 | 16 |
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3 | 6 | 18 |
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4 | 4 | 16 |
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5 | 2 | 10 |
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6 | 0 | 0 |
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7 | -2 | -14 |
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Please find the following quantities
a. Find the quantity at which revenue is maximzed and explain your reasoning
b. Find the quantity where eleasticity is negative 1 (-1) and explain
c. Find the quantity where marginal revenue is 0 and explain
d. What is the revenue maximizing formula (algebra) we could derive?