(a) To rank: the given combinations in the order of preference.

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Answer 1

Question

Chapter 7A, Problem 1E

To determine

(a)

To rank: the given combinations in the order of preference.

Expert Solution

Explanation of Solution

1^s^t preference is "I" as both goods are more.

2ⁿ^d preference is F and H, as 5 goods in total for each combination.

3^r^d preference is C, E and G, as 4 goods in each combination.

4^t^h preference is B and D as 3 goods in total for each combination.

5^t^h preference is A as lowest combination of goods is given.

To determine

(b)

Combinations which cannot be ranked along with the reason.

Expert Solution

Explanation of Solution

2ⁿ^d preference: F and H, 5 goods are given for each combination.

3^r^d preference: C, E and G, 4 goods are given for each combination.

4^t^h preference: B and D, 3 goods are given for each combination.

A consumer is indifferent for the respective combinations in each preference as there is no information given about price and utility.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 7A, Problem 1E

To determine

(a)

To rank: the given combinations in the order of preference.

Expert Solution

Explanation of Solution

1^s^t preference is "I" as both goods are more.

2ⁿ^d preference is F and H, as 5 goods in total for each combination.

3^r^d preference is C, E and G, as 4 goods in each combination.

4^t^h preference is B and D as 3 goods in total for each combination.

5^t^h preference is A as lowest combination of goods is given.

To determine

(b)

Combinations which cannot be ranked along with the reason.

Expert Solution

Explanation of Solution

2ⁿ^d preference: F and H, 5 goods are given for each combination.

3^r^d preference: C, E and G, 4 goods are given for each combination.

4^t^h preference: B and D, 3 goods are given for each combination.

A consumer is indifferent for the respective combinations in each preference as there is no information given about price and utility.

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Answer 3

Question

Chapter 7A, Problem 1E

To determine

(a)

To rank: the given combinations in the order of preference.

Expert Solution

Explanation of Solution

1^s^t preference is "I" as both goods are more.

2ⁿ^d preference is F and H, as 5 goods in total for each combination.

3^r^d preference is C, E and G, as 4 goods in each combination.

4^t^h preference is B and D as 3 goods in total for each combination.

5^t^h preference is A as lowest combination of goods is given.

To determine

(b)

Combinations which cannot be ranked along with the reason.

Expert Solution

Explanation of Solution

2ⁿ^d preference: F and H, 5 goods are given for each combination.

3^r^d preference: C, E and G, 4 goods are given for each combination.

4^t^h preference: B and D, 3 goods are given for each combination.

A consumer is indifferent for the respective combinations in each preference as there is no information given about price and utility.

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Answer 4

Question

Chapter 7A, Problem 1E

To determine

(a)

To rank: the given combinations in the order of preference.

Expert Solution

Explanation of Solution

1^s^t preference is "I" as both goods are more.

2ⁿ^d preference is F and H, as 5 goods in total for each combination.

3^r^d preference is C, E and G, as 4 goods in each combination.

4^t^h preference is B and D as 3 goods in total for each combination.

5^t^h preference is A as lowest combination of goods is given.

To determine

(b)

Combinations which cannot be ranked along with the reason.

Expert Solution

Explanation of Solution

2ⁿ^d preference: F and H, 5 goods are given for each combination.

3^r^d preference: C, E and G, 4 goods are given for each combination.

4^t^h preference: B and D, 3 goods are given for each combination.

A consumer is indifferent for the respective combinations in each preference as there is no information given about price and utility.

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Answer 5

Chapter 7A, Problem 1E

To determine

(a)

To rank: the given combinations in the order of preference.

Expert Solution

Explanation of Solution

1^s^t preference is "I" as both goods are more.

2ⁿ^d preference is F and H, as 5 goods in total for each combination.

3^r^d preference is C, E and G, as 4 goods in each combination.

4^t^h preference is B and D as 3 goods in total for each combination.

5^t^h preference is A as lowest combination of goods is given.

To determine

(b)

Combinations which cannot be ranked along with the reason.

Expert Solution

Explanation of Solution

2ⁿ^d preference: F and H, 5 goods are given for each combination.

3^r^d preference: C, E and G, 4 goods are given for each combination.

4^t^h preference: B and D, 3 goods are given for each combination.

A consumer is indifferent for the respective combinations in each preference as there is no information given about price and utility.

Answer 6

Chapter 7A, Problem 1E

To determine

(a)

To rank: the given combinations in the order of preference.

Expert Solution

Explanation of Solution

1^s^t preference is "I" as both goods are more.

2ⁿ^d preference is F and H, as 5 goods in total for each combination.

3^r^d preference is C, E and G, as 4 goods in each combination.

4^t^h preference is B and D as 3 goods in total for each combination.

5^t^h preference is A as lowest combination of goods is given.

Answer 7

Chapter 7A, Problem 1E

To determine

(a)

To rank: the given combinations in the order of preference.

Answer 8

Expert Solution

Explanation of Solution

1^s^t preference is "I" as both goods are more.

2ⁿ^d preference is F and H, as 5 goods in total for each combination.

3^r^d preference is C, E and G, as 4 goods in each combination.

4^t^h preference is B and D as 3 goods in total for each combination.

5^t^h preference is A as lowest combination of goods is given.

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

(b)

Combinations which cannot be ranked along with the reason.

Expert Solution

Explanation of Solution

2ⁿ^d preference: F and H, 5 goods are given for each combination.

3^r^d preference: C, E and G, 4 goods are given for each combination.

4^t^h preference: B and D, 3 goods are given for each combination.

A consumer is indifferent for the respective combinations in each preference as there is no information given about price and utility.

Answer 13

To determine

(b)

Combinations which cannot be ranked along with the reason.

Answer 14

Expert Solution

Explanation of Solution

2ⁿ^d preference: F and H, 5 goods are given for each combination.

3^r^d preference: C, E and G, 4 goods are given for each combination.

4^t^h preference: B and D, 3 goods are given for each combination.

A consumer is indifferent for the respective combinations in each preference as there is no information given about price and utility.

Answer 15

Expert Solution

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Ch. 7A - Prob. 1E Ch. 7A - Prob. 2E Ch. 7A - Prob. 3E

(a) To rank: the given combinations in the order of preference.

(a) To rank: the given combinations in the order of preference.

Explanation of Solution

(b) Combinations which cannot be ranked along with the reason.

Explanation of Solution

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Chapter 7A Solutions

(a)

To rank: the given combinations in the order of preference.

(b)

Combinations which cannot be ranked along with the reason.