MACROECONOMICS >C< W/MYECONLAB
18th Edition
ISBN: 9781323886038
Author: Pearson
Publisher: Pearson Custom Publishing
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Chapter 21, Problem 4.1P
To determine
Draw the consumption function then calculate the error term and the sum total.
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Advertising A small manufacturing firm collected the following data on advertising expenditures A (in thousands of dollars) and total revenue R (in thousands of dollars).
(a) Draw a scatter diagram of the data. Comment on the type of relation that may exist between the two variables
(b) The quadratic function of best fit to these data is R(A) = - 7.76A2 + 411.88A + 942.72 Use this function to determine the optimal level of advertising. (c) Use the function to predict the total revenue when the optimal level of advertising is spent. (d) Use a graphing utility to verify that the function given in part (b) is the quadratic function of best fit. (e) Use a graphing utility to draw a scatter diagram of the data, and then graph the quadratic function of best fit on the scatter diagram.
Using the data in the table below, calculate Aggregate Expenditure (AE), Savings (S), and increasing inventories Change (UI). Please ensure you show
and input the negative sign where necessary for your answers on savings and undesired inventory changes.
Aggregate Expenditure
(AE)
Number
Number
Number
Income (Y)
550
640
730
Consumption (C)
577.5
636
694.5
Investment (1)
135
135
135
Savings (S)
Number
Number
Number
Inventory Disequilibrium
Number
Number
Number
The trade-in value, V, of a certain model of automobile can be determined
using the function V(x)=25000-0.25x, where x is the mileage. Which of the
following statements is the best interpretation of the slope? *
The trade-in value of the car decreases $1 for every additional 4 miles driven.
The trade-in value of the car decreases $4 for every additional mile driven.
The value of the car increases as the mileage increases.
The selling price of the car when it is new is $25,000.
Chapter 21 Solutions
MACROECONOMICS >C< W/MYECONLAB
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