Homework #1 APEC 5020

.docx

School

Utah State University *

*We aren’t endorsed by this school

Course

5020

Subject

Economics

Date

Feb 20, 2024

Type

docx

Pages

3

Uploaded by UltraValorLeopard30

Report
APEC 5020 Name . Homework #1 (100 points) For homework #1 solve the following problems in the corresponding excel file. Upload your completed assignment as a pdf file on canvas. Be sure to attach a pdf of your completed excel file to your submitted homework file to show your work. (Note: showing your work is required for this assignment, also copying your excel work and pasting it as a picture to a word file first before converting it to a pdf will help get all your work on one page). Homework is worth a good amount of points in this course so be sure to take your time and double check your work. If you get stuck, recorded lecture five: rolling out a new product works through similar problems in excel. I have changed the parameters from that class so your answers should be different but the process will be the same. Section 1: First tab of the excel file, real prices, drift rates, and projections 1. On the first tab of your excel file, you will find historical prices for alfalfa and consumer price index data across years. Use CPI to convert your nominal alfalfa prices into real alfalfa prices. Use 2020 as your base year. What is the real price of alfalfa in 2014? 2. Once you have calculated the real price of alfalfa for all of the years (2001-2020) calculate the percent change in real prices from year to year. Remember that you will lose your first observation (cell E4). Write the formula you used to calculate % change in real prices. 3. What was the percent change in real prices from 2004-2005? 4. Once you have calculated the percent change for each year, calculate the drift rate to find the average real price change across all years. What formula do you use to calculate the drift rate?
5. What is the drift rate in real alfalfa prices between 2001-2020? 6. Move further down the first tab to the projection part of the assignment. Now that you have calculated the historical drift rate you can use that to make predictions about future alfalfa prices. Assume real prices today (year 0) start out at where they were last year $125 per ton. (if your nominal price for 2020 doesn’t match your real price for 2020 you did something wrong). Use the drift rate you calculated to estimate the future price for years 1-4 into the future. What formula would you use to estimate the future price t years in the future? 7. What would you predict real alfalfa prices to be 4 years in the future (cell B38)? Section 2: Second tab of the excel file estimating marginal cost and calculating optimal outputs levels of output. 8. Open the second tab in your excel file. Assume that the only variable input to the product being produced is labor and that wages are $11/hr. Calculate variable cost for all levels of production. What is the variable cost when 10 hours of labor or used? 9. Use your calculations for 8 and your given fixed cost of $500,000 to calculate total cost for all levels of output. What is the total cost associated with 3,000 units of output? 10. Calculate Marginal cost for each additional unit of output. What formula would you use to calculate marginal cost?
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help