2. Exercise 9.2A study of 86 savings and loan associations in six northwestern states yielded the following cost function.C3.41(3.41)0.007384Q(2.84)0.000005359Q2(3.16)23.0X1(3.23)where C = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($million) times 100 percent.Q = output; measured by total assets ($ million)X₁ = ratio of the number of branches to total assets ($ million)Note: The number in parentheses below each coefficient is its respective t-statistic.Holding constant the effects of bank branching (X1), what is the level of total assets that minimizes the average operating expense ratio?$1,557.42 millionO $688.93 million$461.81 million$1,377.87 millionWhat is the average operating expense ratio for a savings and loan association with the level of total assets determined in the previous part and 1branch?1.18%0.90%4.94%3.44%What is the ratio with 10 branches instead?1.20%○ 1.48%O 3.74%5.24%

The cost function connects the average operating expense ratio of a savings and loan association to…

Answered: 2. Exercise 9.2 A study of 86 savings…

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter4: Economic Evaluation In Health Care

Section: Chapter Questions

Problem 7QAP

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1. Exercise 9.1 A study of 86 savings and loan associations in six northwestern states yielded the following cost function. C 2.38 (3.33) 0.006153Q (3.08) 0.000005359Q² (3.16) 19.2X₁ (2.96) where C = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q = output; measured by total assets ($ million) X₁ = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Which of the variable(s) is (are) statistically significant in explaining variations in the average operating expense ratio? (Hint: £0.025,70 = 1.99.) Check all that apply. Q2 What type of average cost-output relationship is suggested by these statistical results? ○ Cubic Linear Quadratic Based on these results, what can we conclude about the existence of economies or diseconomies of scale in savings and loan associations in the…
1. Exercise 9.1 A study of 86 savings and loan associations in six northwestern states yielded the following cost function. 2.38 0.006153Q 0.000005359Q² 19.2X1 C + + (2.62) (2.84) (3.16) (3.50) where C = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q = output; measured by total assets ($ million) X1 = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Which of the variable(s) is (are) statistically significant in explaining variations in the average operating expense ratio? (Hint: t0.025,7€ 1.99 .) Check all that apply. X1 Q2 What type of average cost-output relationship is suggested by these statistical results? Quadratic Linear Cubic Based on these results, what can we conclude about the existence of economies or diseconomies of scale in savings and loan associations in…
A study of 86 savings and loan associations in six northwestern states yielded the following cost function. C� = 3.69 - 0.007999Q� + 0.000005359Q2�2 + 25.0X1�1 (3.69) (3.08) (3.42) (3.50) where C� = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q� = output; measured by total assets ($ million) X1�1 = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Holding constant the effects of bank branching (X1�1), what is the level of total assets that minimizes the average operating expense ratio? $746.31 million $1,562.70 million $1,492.63 million $461.31 million What is the average operating expense ratio for a savings and loan association with the level of total assets determined in the previous part and 1 branch?…
A study of 86 savings and loan associations in six northwestern states yielded the following cost function. C = 3.12 - 0.006768Q + 0.000005359Q2 +21.1X1 (3.12) (2.61) (2.89) (2.96) where C = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q = output; measured by total assets ($ million) X1 = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Holding constant the effects of bank branching (X1), what is the level of total assets that minimizes the average operating expense ratio? $1,262.92 million $1,558.81 million $631.46 million $460.99 million What is the average operating expense ratio for a savings and loan association with the level of total assets determined in the previous part and 1 branch? 1.17% 3.15% 1.02% 5.63% What is the ratio with 10 branches instead? 5.93% 1.47%…
A study of 86 savings and loan associations in six northwestern states yielded the following cost function. C� = 2.38 - 0.006153Q� + 0.000005359Q2�2 + 19.2X1�1 (2.86) (3.08) (3.68) (2.96) where C� = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q� = output; measured by total assets ($ million) X1�1 = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Which of the variable(s) is (are) statistically significant in explaining variations in the average operating expense ratio? (Hint: t0.025,70=1.99�0.025,70=1.99.) Check all that apply. Q� Q2�2 X1�1 What type of average cost-output relationship is suggested by these statistical results? Quadratic Cubic Linear Based on these results, what can we…
A manufacturer of Chocolate has a fixed cost of Tk.60000 and variable cost is Tk.7 perproduced Chocolate. Selling price is Tk.10 per Chocolate.Requirement- At what number of units will break even occur and At what sales (revenue) volume will break occur?
ATC, AAC, AVC, MC (/uni 270.00 24000 21000 180.00 150.00 120.00 10:00 60.00 30.00 0:00 02 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 Units of Output (0) Unit Cost Curves Refer to the graph above. The curves are not labeled. To help get this question right, you must first label the curves. An output level of 18 is identified with the dark vertical line. The shaded rectangular area (height times width) is the O average sunk cost. O total sunk cost O total avoidable fed cost. O total avoidable cost. O None of the above
If explicit cost equals to $40000 and implicit cost $ 95,000 and the accounting profit is $23,000 what is the revenue and the economic profit
1. A company in the process industry produces a chemical compound that is sold to manufacturers for use in the production of certain plastic products. The plant that produces the compound employ approximately 300 people. (12 pts) Develop a list of six different cost elements that would be fixed and a similar list of six cost elements that would be variable. FIXED COSTS VARIABLES COSTS 1. 2. 1. 3. 3. 4. 4. 5. 5. 6. 6. 2/345n6
The following cost-output data were obtained as part of a study of the economies of scale in operating a charter high school in Wisconsin: Students in Average Daily Attendance Midpoint of Values in Column A Operating Expenditure per Student Number of Schools in Sample (A) (B) (C) (D) 143-200 171 $531.9 6 201-300 250 480.8 12 301-400 350 446.3 19 401-500 450 426.9 17 501-600 550 442.6 14 601-700 650 413.1 13 701-900 800 374.3 9 901-1100 1000 433.2 6 1101-1600 1350 407.3 6 1601-2400 2000 405.6 7 Plot the data in columns B and C in an output (enrollment-) cost graph and sketch a smooth curve that would appear to provide a good fit to the data. Based on the scatter diagram in Question 1, what kind of mathematical relationship would appear to exist between enrollment and operating expenditures per student? In other words, do operating expenditures per student appear…
Your boss is the director of reporting for the Athens County Construction Agency (ACCA). It has been his job to track the cost of construction in Athens County. Twentyfive years ago, he created the ACCA Cost Index to track those costs. Costs during the first year of the index were $14 per square foot of constructed space (the index value was set at 100 for that first year). This year a survey of contractors revealed that costs were $70 per square foot. (a) What index number will your boss publish in his report for this year? (b) If the index value was 500 last year, what was the cost per square foot last year?
please do c, d, e

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