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17 Jan 2019

1)


Explain "ceteris paribus, holding other variables constant" concept in case of multivariate regression analysis. (Hint: You can provide an example to make your point)


2)


What is the difference between Y and Y_hat?

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Beverley Smith
Beverley SmithLv2
18 Jan 2019

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Related questions

Focus on one of the main concepts covered (e.g., scarcity, ceteris Paribus, association vs. causation, opportunity cost, marginal analysis, etc.), define it in your own words, and provide an example. Discuss why you think this is an important aspect of the study of economics.

Macroeconomics Module 1 Homework Assignment – McDonald’s

25 points

Watch the video Minimum Wage Backfire: McDonald's Goes Touchscreen, and answer the following questions. Please limit your answers to 4-5 sentences, one paragraph for each question, maximum.

How is McDonald’s considering the concepts of opportunity costs and benefits in its analysis of minimum wages?

Considering McDonald’s use of technology in this example, explain the concept of the fundamental questions, “How will the goods be produced?” and “How will the system accommodate change and promote progress?”

Without the change in technology, ceteris paribus, what would be the effect of an increase in wages on equilibrium price and quantity of McDonald’s burgers? What would happen to equilibrium prices and quantity, ceteris paribus, if technology does replace many workers, according to the expectations of the industry as indicated in this video?

ELASTICITY

We can gain insight by manipulating the price elasticity of the demand equation. With the information provided below, demonstrate what happens in the specific markets.

a) Suppose there is a technological change that allows manufacturers to make Android smartphones much more cheaply. In fact, the retail price falls by 15%, ceteris paribus.

i) If the price elasticity of demand is -0.8, how much does the quantity demanded change?

ii) Statement: the producers are definitely better off. True, false, uncertain, or not enough information? Explain why? (Hint: recall elasticity-total revenue table. The simple way is to construct a numerical example i.e., where the initial price is $100, while the initial quantity is 100 units. )

b) In an alternative scenario, ceteris paribus, suppose there is a new tax on data usage. The income-tax monthly bill increases by 10%.

i) If the price elasticity of demand is -0.45, how much does the quantity demanded change?

ii) Statement: the data plan providers are definitely worse off. True, false, uncertain, or not enough information? Explain why? (Hint: recall elasticity-total revenue table. The simple way is to construct a numerical example i.e., where the initial price is $100, while the initial quantity is 100 units. )

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