Consider an equilibrium of a single product market jointly determined by a supply function q* = a, + a, • p* + U and a demand function q* = Bo + B1 • p° + V, where q* indicates the equilibrium quantity and p* indicates the equilibrium price, then O A. we will run into the simultaneous equations problem, which will cause estimation inconsistency. O B. we can have bi-directional causality between q* and p*. O C. q* and p* will both be endogenous. O D. all of the above.

23. Consider a simple economy with just two industries: farming and manufacturing. Farming consumes 1/2 of the food and 1/3 of the manufactured goods. Manufacturing consumes 1/2 of the food and 2/3 of the manufactured goods. Assuming the economy is closed and in equilibrium, find the relative outputs of the farming and manufacturing industries.

The Capital Asset Price Model (CAPM) is a financial model that attempts to predict the rate of return on a financial instrument, such as a common stock, in such a way that it is linearly related to the rate of return on the overal market. Specifically, RStockAiBo + BR Markets + e You are to study the relationship between the two variables and estimate the above model: R StockAi-rate of return on Stock A for month i, i = 1,2,---, 59. RMarket-market rate of return for month i, i=1,2,..., 59. B₁ represent's the stocks 'beta' value, or its systematic risk. It measure's the stocks volatility related to the market volatility. Bo represents the risk-free interest rate. The data in the .csv file contains the data on the rate of return of a large energy company which will be referred to as Acme Oil and Gas and the corresponding rate of return on the Toronto Composite Index (TSE) for 59 randomly selected months. Therefore Re, represents the monthly rate of return for a common share of Acme Oil…

1. Benefit Cost analysis.Assume a benefit function B = 60*x^.8 and a cost function C = 4 + 7*x^1.5. The maximum difference between B and C are the net benefits. a) Find the value of x that results in the maximum net benefits. b) Would an increase in the fixed cost of 4 affect the value of x? c) Use a Lagrangian model to find the value of the shadow price, or Lagrangian multiplier, if x cannot exceed 5. What does the multiplier signify?