What interpretation would you give the exponent for r

Assignment Help Econometrics

Reference no: EM13224978

An estimate of the demand function for household furniture produced the following results:

F=0.0036Y R P r =0.996

Where F=furniture expenditures per household

Y=disposable personal income per household

R=value of private residential construction per household

P=ratio of furniture price index to the consumer price index

(A) Determine the point price and income elasticities for household furniture.

(B) What interpretation would you give the exponent for R? Why do you suppose R was included in the equation as a variable?

(C) If you were a supplier to the furniture manufacturer, would you have preferred to see the analysis performed in physical sales units rather than dollars of revenue? How would this change alter the interpretation of the price coefficient, presently estimated as -0.48?

Reference no: EM13224978

Questions Cloud

Explain what is the mass consumed during the reaction : completely reacts. What is the mass (s) consumed during the reaction?

What would conclude about the price elasticity of supply : In the week of February 9-15, the rose market cleared at a price of $1.00 per stem and 4,000,000 stems were sold that week. During the week of June 5-11, the rose market cleared at a price of $0.20 per stem and 3,800,000 roses were sold.

Is assumption that more is better satisfied for both goods : a. Is the assumption that more is better satisfied for both goods b. What is the MRS for this utility function c. Is the MRS increasing, decreasing, or staying concstant as the consumer substitutes X for Y along an indifference curve

What combination of monetary and fiscal policy should choose : A small economy with a floating exchange rate is in reccession with balanced trade. If policymakers wnt ti reach full employment while maintaining blanced trade, what combination of monetary and fiscal policy should they choose

What interpretation would you give the exponent for r : If you were a supplier to the furniture manufacturer, would you have preferred to see the analysis performed in physical sales units rather than dollars of revenue How would this change alter the interpretation of the price coefficient, presently ..

What moral dimensions are raised by this use of information : How does the use of electronic voting machines act as a double-edged sword? What moral dimensions are raised by this use of information technology?

Determine the minimum attractive rate of return : A pallet recycler has offered to purchase pallets, which are of certain sizes and in good condition. The pallets that are in these sizes and in acceptable condition amount to half the scrapped pallets. The pallet recycler is offering to pay $1.00 ..

Which ones will it have difficulty exercising : You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. What competitive strategies could Smalltown Computer exert? Which ones will it have difficulty exercising?

Find out the equilibruim constant kc : At a given temperature,0.0500 mol NO, 0.200 mol Cl2, and 0.550 mol CINO were placed into a 1.00 L container. The equilibrium below was established and 0.250 mol of CINO is present. Determine the equilibruim constant (Kc).

User Account

All Pages