ELEMENTARY THEORIES OF DEMAND AND SUPPLY AND THE
THEORY OF CONSUMER BEHAVIOUR
LEARNING OBJECTIVES
At the end of the lesson the student should be able to:
Distinguish between demand, desire, need and want.
Know the factors that affect the quantity demanded
2. SIMPLE REGRESSION MODEL
You guys are just like this lion cub. You look innocent.
Simple means there are only one variable on the right hand side.
One variable on the left hand side[RHS]
One variable on the right hand side[LHS
= 1 + 2 +
is called a
1. Review of statistics
11 What is probability?
Throwing a coin.
What is the probability of getting a head?
How do we know?

Assuming a fair coin. 1/2

Throw a coin for many many times.
12 Probabilistic Event
a. Coin Toss
Outcome:
head or tail
Head cf
We have a simple regression model
yi 1 2 xi ei and the assumptions of the Gauss
Markov theorem hold. The variance of eis are
2.
1.
Now you have done the estimation. What you need to do next? Explain why you need to do that.
2.
When discussing the unbias
10. Heteroskedasticity
Heteroscedasticity or heteroskedasticity?
Heteroscedasticity
Pronunciation: screen vs scene
It is published in Econometrica 1985.
Nowadays heteroskedasticity is more popular.
101 What is Heteroskedasticity?
Definition. Simple varia
5. Modeling Issues
51 Scaling
Use data collected from Econometrics and Macroeconomics class. 2012 Fall
y= 1 + 2 x +
Data
Weight measured in kg,
Height
measured in cm
Dependent Variable: WT
Method: Least Squares
Date: 12/04/12 Time: 12:03
Sample: 1 58
In
We have a simple regression model yi 1 2 xi ei and the assumptions of the
GaussMarkov theorem hold.
The variance of eis are 2 .
1.
Derive the least squares estimators b1 and b2 for the true parameters 1 and 2 .
2.
Calculate the sample covariance between
4. INFERENCE IN REGRESSION MODEL
So far we tried to get the estimate of the true parameter.
In other words, we tried to find the candidate for the true parameter value which
is a unknown nonrandom constant
Now we want to get the range of the true value
4
3 Measuring Goodness of Fit & Prediction
31 Fitted value and residual
Fitted value :
= 1 + 2
Residual i :

= 1 2
Using fitted value and the residual, we can write
= +

Square both sides,
2 = 2 + 2 + 2

Sum both sides,
2 = 2 + 2 + 2
since = 0
=
Homework #2
1. Let be a continuous random variable with probability density function given by
() = .5 + 1
0 2
=0
< 0, > 2
(a) Calculate the mean of the random variable X.
(b) Calculate the variance of the random variable X.
2. Let be a continuous random
Multiple Choice Questions
64. A tool that is not used for quality management is _.
A. Flowchart
B. Histogram
C. Perato Analysis
D. Redesign
E. Check sheets
65. The four dimensions of quality that are sometimes used to determine fitness for use
of a produc
Multiple Choice Questions
24. Nearness to raw materials would be most important to a
A. grocery store
B. tax preparation service
C. manufacturing company
D. post office
E. hospital
25. A onehour photo processing machine in a WalMart store is an example
Chapter 08S
The Transportation Model
True / False Questions
1. The transportation model assumes similar, homogeneous goods.
True False
2. The transportation model assumes shipping cost per unit is the same regardless of
the number of units shipped (there
Chapter 17  Project Management
Chapter 17
Project Management
True / False Questions
1. Good project management is especially important with virtual teams.
TRUE
Difficulty: Easy
TLO: 1
Taxonomy: Knowledge
2. One way that project management differs from ma
Chapter 08S
The Transportation Model
True / False Questions
1. The transportation model assumes similar, homogeneous goods.
True False
2. The transportation model assumes shipping cost per unit is the same regardless of
the number of units shipped (there
Multiple Choice Questions
49. Which of the following is not a process commonly considered in making products or
delivering services?
A. continuous
B. batch
C. repetitive
D. job shop
E. subcontracting
50. The type of processing system which is used for hig
Multiple Choice Questions
22. The purpose of acceptance sampling is to:
A. estimate process quality
B. estimate lot quality
C. detect and eliminate defectives
D. decide if a lot meets predetermined standards
E. accept samples of products
23. Acceptance sa
Multiple Choice Questions
56. Which of the following quality control sample statistics indicates a quality
characteristic that is an attribute?
A. mean
B. variance
C. standard deviation
D. range
E. proportion
57. A timeordered plot of representative samp
Chapter 12  Inventory Management
Chapter 12
Inventory Management
True / False Questions
1. One important use of inventories in manufacturing is to decouple operations through the
use of work in process inventories.
TRUE
Difficulty: Medium
TLO: 1
Taxonomy
Chapter 13  Aggregate Planning
Chapter 13
Aggregate Planning
True / False Questions
1. Aggregate planning is intermediaterange capacity planning that typically covers a time
horizon of one to three months.
FALSE
Difficulty: Medium
TLO: 1
Taxonomy: Knowl
Chapter 11  Supply Chain Management
Chapter 11
Supply Chain Management
True / False Questions
1. A company's supply chain involves the flow of materials and information from suppliers,
through production, to the end users.
TRUE
Difficulty: Easy
TLO: 1
Ta
Chapter 09  Management of Quality
Chapter 09
Management of Quality
Multiple Choice Questions
64. A tool that is not used for quality is _.
A. Flowchart
B. Histogram
C. Parato Analysis
D. Redesign
E. Check sheets
Difficulty: Medium
TLO: 10
Taxonomy: Knowl
Chapter 15: Target Costing and Cost Analysis for Pricing Decisions
MULTIPLE CHOICE QUESTIONS
1. Which of the following can influence a company's pricing decisions?
A. Manufacturing costs.
B. Competitors.
C. Customer demand.
D. Pricing laws.
E. All of the
Chapter 14: Decision Making: Relevant Costs and Benefits
MULTIPLE CHOICE QUESTIONS
1. Managerial accountants:
A. rarely become involved in an organization's decisionmaking activities.
B. make decisions that focus solely on an organization's accounting ma
Chapter 10: Standard Costing, Operational Performance Measures, and
the Balanced Scorecard
MULTIPLE CHOICE QUESTIONS
1. A standard cost:
A. is the "true" cost of a unit of production.
B. is a budget for the production of one unit of a product or service.
Chapter 12: Responsibility Accounting, Quality Control, and Environmental Cost
Management
MULTIPLE CHOICE QUESTIONS
1. When managers of subunits throughout an organization
strive to achieve the goals set by top management, the
result is:
A. goal congruenc
Multiple Choice Questions
1. The biggest challenge in making a decentralized organization function effectively is:
A. earning maximum profits through fair practices.
B. minimizing losses.
C. taking advantage of the specialized knowledge and skills of high
Chapter 9: Profit Planning, ActivityBased Budgeting, and eBudgeting
MULTIPLE CHOICE QUESTIONS
1. Generally speaking, budgets are not used to:
A. identify a company's most profitable products.
B. evaluate performance.
C. create a plan of action.
D. assis