Other Economics Answers

Briefly discuss using practical examples how you would conduct each of the following:

i. Market assessment

ii. Production assessment

iii. Legal environmental assessment

iv. Human resource assessment

v. Suppliers assessment

vi. Credit policies assessment

vii. Management and organisation assessment

viii. Professional and advisory support assessment

Identify what method of customer profiling is described. Write DEM for Demographics, PSYCH for Psychographics and TECH for Technographics.

____________ 1. Lifestyle classifications talk about what people value most in their lives.

____________ 2. Sports regulars may be looking for more sophisticated equipment.

____________ 3. It defines the customer’s motivations, perceptions, preferences, and lifestyle.

____________ 4. Social classes and reference groups often dictate what is acceptable or unacceptable behavior.

____________ 5. Cultural beliefs of people such as the food they eat, how they save and how they spend, and their levels of conservatism or progressiveness.

Identify what method of customer profiling is described. Write DEM for Demographics, PSYCH for Psychographics and TECH for Technographics.

____________ 1. Income levels determine the purchasing power of customers.

____________ 2. Physiological needs and wants refer to the customer’s personal likes and dislikes and include the satisfaction of thirst, hunger, and shelter.

____________ 3. Different persons may actually see different things in very different ways.

____________ 4. Areas of residence and environmental surroundings, oftentimes, define and limit the choices available to customers.

____________ 5. Classifies people according to their level of expertise in using a product or a service.

Indicate under which item of the current account each of the following transactions is recorded and whether it will increase or decrease the balance on the current account. a. Capeson, a Chadilien exporting company, exports fruit to the Middle East. (2 Marks) b. Jones and Kelly, a Chadilien engineering firm, hires German engineers to help with the construction of new stadiums. (2 Marks) c. You receive a dividend (a part of the profit) because you own some shares in Amazon which is based in the US. 

Monopolistically firm sells balls. What will be the profit?

Price Data quantity Data output Total cost

$11 6 6 $48

$10 7 7 $52

$9 8 8 $57

$8 9 9 $63

$7 10 10 $70

Use the uploaded dataset titled ‘ceosal2’ to model the relationship between company’s CEO salary and sales. The variables are defined as the following: Y = CEO’s salary, in thousands of dollars X1 = firm sales, in millions of dollars X2 = company’s market value, in millions of dollars X3 = years of tenure as CEO with the company Now, consider the following model specifications: 𝑙𝑛 𝑌 = 𝛼0 + 𝛼1𝑙𝑛𝑋1 + 𝑢 (1) l

n 𝑌 = 𝛽0 + 𝛽1𝑙𝑛𝑋1 + 𝛽2𝑙𝑛𝑋2 + 𝛽3𝑋3 + 𝑣 (2)

The basic specification (equation 1) tests the effect of firm sales on CEO’s salary (both in logarithmic form). The basic model can be extended to include logarithm of firm market value and CEO’s tenure with the company that are expected to increase CEO’s salary.

a. Estimate both equations and present in tabular format without using outreg2. Include columns for standard errors and t-statistics.

Consider the following estimated OLS regression capturing relationship between weight loss and distance walked (values in round brackets are the estimated t-statistics): 𝑤𝑒𝑖𝑔̂ℎ𝑡 = −0.65 − 8.2 ln(𝑤𝑎𝑙𝑘) + 0.35𝑐𝑎𝑙𝑜𝑟𝑖𝑒 (-9.028) (-3.04) (6.604) 𝑅̅ 2 = 0.53 

v. Can you compute the standard errors of the regression coefficients based on the regression output provided? 

Consider the following estimated OLS regression capturing relationship between weight loss and distance walked (values in round brackets are the estimated t-statistics): 𝑤𝑒𝑖𝑔̂ℎ𝑡 = −0.65 − 8.2 ln(𝑤𝑎𝑙𝑘) + 0.35𝑐𝑎𝑙𝑜𝑟𝑖𝑒 (-9.028) (-3.04) (6.604) 𝑅̅ 2 = 0.53 where weight is person’s weight in kilograms, walk is distance walked in km per day, calorie is number of calories consumed in thousands per day 

iii. Comment on 𝑅̅ 2. Is it too “low”? 

Consider the following estimated OLS regression capturing relationship between weight loss and distance walked (values in round brackets are the estimated t-statistics): 𝑤𝑒𝑖𝑔̂ℎ𝑡 = −0.65 − 8.2 ln(𝑤𝑎𝑙𝑘) + 0.35𝑐𝑎𝑙𝑜𝑟𝑖𝑒 (-9.028) (-3.04) (6.604) 𝑅̅ 2 = 0.53 where weight is person’s weight in kilograms, walk is distance walked in km per day, calorie is number of calories consumed in thousands per day 

ii. Is the observed negative relationship between ln(walk) and weight justifiable a priori? 

e. Consider the following estimated OLS regression capturing the relationship between weight loss and distance walked (values in round brackets are the estimated t-statistics):

𝑤𝑒𝑖𝑔̂ℎ𝑡 = −0.65 − 8.2 ln(𝑤𝑎𝑙𝑘) + 0.35𝑐𝑎𝑙𝑜𝑟𝑖𝑒 (-9.028) (-3.04) (6.604)

𝑅̅ 2 = 0.53 

where weight is person’s weight in kilograms, walk is distance walked in km per day, calorie is number of calories consumed in thousands per day

i. Interpret the coefficient on ln(walk). Explain what can we capture by using ln(walk) in the model instead of just using walk.