Economic Cost versus Accounting Cost
accounting cost Actual expenses plus depreciation charges for capital equipment.
economic cost Cost to a firm of utilizing economic resources in production, includ
Economics for Decision Making
Quiz 2 Information
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Arefaine Yohannes
Summer, 2015
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1.
Quiz 2 will be given on Saturday, July 11, 2015.
2.
The quiz will be based on everything we covered in class
Economics for Decision-Making
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Arefaine Yohannes
Summer, 2015
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Production Function
Y = 100 K 0.5 L 0.5
where: 100 = total factor productivity
Exponent of capital
= elasticity of output with resp
Economics for Decision-Making
HW 6 (Graded)
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Arefaine Yohannes
Summer, 2015
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Consider the following data:
Output (Q) = 50L0.5 K0.5
where:
L = labor
K = capital
Answer the questions #1 - #3.
1.
W
Economics for Decision-Making
HW 6 (Graded)
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Arefaine Yohannes
Summer, 2015
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Consider the following data:
Output (Q) = 50L0.5 K0.5
where:
L = labor
K = capital
Answer the questions #1 - #3.
1.
W
DEMAND ANALYSIS
Determinants of Demand
The Price Elasticity of Demand
Arc and point price elasticity
Elasticity and revenue relationships
Why some products are inelastic and others are
elastic
I
Economics for Decision-Making
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Arefaine G-Yohannes
Summer, 2015
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Forecasting Methods:
1. Stationary (horizontal) Series: flat sales over time
a. simple moving average method
b. simple (or one pa
Know how to solve the derivatives that have greater than one exponents. They must be solved by taking the derivative and not assuming the coefficient
p
I
Pa
9a
9b
9c
9d
Year
Sales
1
2
3
4
5
6
7
8
9
10
Know how to solve the derivatives that have greater than one exponents. They must be solved by taking the derivative and not assuming the coefficient
p
I
Pa
9a
9b
9c
9d
5
10
4
5.05
10.1
4.04
1
22.5 -0
Quiz one
1 Simple probability
2 z score while using a loss scenario. Set r = 0; z=(r-expR)/std dev
Probility of profit, subtract the above scenario from 1. Also another z table while incorporating -/+
Economics for Decision-Making
Home Work 2
(not graded)
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Arefaine Yohannes
Summer, 2015
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1. Consider the following data:
Possible Sales
Probability
$90 million
80 million
0.4
0.6
a. What is the a
Economics for Decision Making
Information for Quiz 1
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Arefaine Yohannes
Summer, 2015
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_
1.
Quiz 1 will be given on Saturday, June 13, 2015.
2.
The quiz will be based on everything we covered in We
Market Model
Demand, Supply, and Equilibrium Review
Demand and Supply: Applications
Profit maximization
Present Value, Discounting & Net Present Value
Risk and Expected Value
Probability Distributions
Example of Two Gambles
prob
r
0.5
0.5
prob
r
10
20
r
0.4
0.6
r
5
10
15
r
90
80
r^2
-5
5
r
36
48
84
25
25
r^2
6
-4
r^2*Prob
12.5
12.5
25 Variance
5 Std Dev
0.333333 CV
std dev / exp return
r^2*Prob
36
Economics for Decision-Making (S)
Home Work 1
(Graded)
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Arefaine G - Yohannes
Summer, 2015
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1.
The demand for a product is likely to shift to the right if:
a. Household income increases
b. The n
Economics for Decision-Making (S)
Home Work 1
(Graded)
_
_
Arefaine G - Yohannes
Summer, 2015
_
_
1.
The demand for a product is likely to shift to the right if:
a. Household income increases
b. The n