Economic Data Analysis Questions
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Economic Data Analysis
Question 1
For this problem, answer the questions below and also paste a screenshot of your Excel
worksheet after solving in Problem Solver.
3. Use Excel Problem Solver for this problem. Save your answers on a worksheet.
Assume that at a particular gas station, the quantity (gallons) of automobile fuel sold in a week
is a function of the fuels retail price per gallon, p.
Q = (1,000 300p)
Revenues from weekly sales equal quantity*price:
Revenue = 1,000p 300p2
a. Find the price that maximizes revenue. What is the maximum value of revenue?
b. Also solve the problem using simple calculus to confirm that the answer is the same as
above.
Question 2
3. Below you will find Stata output for two regressions, one where the monthly earnings
(measured in dollars), wage, is a function of years of education, and one where the natural log
of monthly earnings is a function of years of education.
a.
For the first regression, calculate the R-squared and interpret.
b. For the first regression, write the estimated regression and interpret the estimated
coefficient on years of education.
c. For the second regression, interpret the estimated coefficient on years of education.
d. What is the standard error of the estimated coefficient of education in the first
regression? What could increase or decrease this standard error (see the formula)?
. reg wage educ
Source |
SS
df
MS
————-+—————————–Model | 16340644.5
1 16340644.5
Residual |
136375524
933 146168.836
————-+—————————–Total |
152716168
934 163507.675
Number of obs
F( 1,
933)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
935
111.79
0.0000
382.32
—————————————————————————–wage |
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
————-+—————————————————————educ |
60.21428
5.694982
10.57
0.000
49.03783
71.39074
_cons |
146.9524
77.71496
1.89
0.059
-5.56393
299.4688
—————————————————————————–. regress lwage educ
Source |
SS
df
MS
————-+—————————–Model | 16.1377042
1 16.1377042
Residual | 149.518579
933 .160255712
————-+—————————–Total | 165.656283
934 .177362188
Number of obs
F( 1,
933)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
935
100.70
0.0000
0.0974
0.0964
.40032
—————————————————————————–lwage |
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
————-+—————————————————————educ |
.0598392
.0059631
10.03
0.000
.0481366
.0715418
_cons |
5.973063
.0813737
73.40
0.000
5.813366
6.132759
——————————————————————————
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Tags:
finance
Economy
revenues
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