To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

Question

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Answer 1

Question

Chapter 9, Problem 1E

a)

To determine

To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

a)

Expert Solution

Explanation of Solution

In statistics the t-statistics is the ratio of the departure of a parameter's estimated value from its hypothesized value to its standard error. It is used via the Student's t-test in hypothesis testing. For a T test the T-statistic is used to determine whether the null hypothesis should be accepted or rejected.

These variables are tested at the statistically significant level of 5% that is 0.5.

Variable is significant, that is t value is larger than 0.025; the value of 0.025 is around 2. All the t values of variable are greater than the 2.00; hence, all values are significant in explaining the cause and effect relationship.

Economics Concept Introduction

Introduction: The Operating Expense Ratio (OER) is a measure of the cost of operating a piece of property compared with the property’s revenue. It is calculated by dividing the operating expense (minus depreciation) of a property by its gross operating revenue and is used to compare expenses of similar properties.

c)

To determine

To evaluate the conclusion about the existence of economies or diseconomies of scale in savings and loan associations in the northwest

c)

Expert Solution

Explanation of Solution

The cost analysis is concerned with determining the money value of inputs (labor, raw materials), referred to as the total cost of production which helps to determine the optimum production level.

It can be concluded here that cost and output relationship show that the shape of cost is U shaped, U shape of cost curve denotes that cost decreases up to the certain point and economies of scale ensues. After the certain level of output, economies of scale changes into diseconomies of scale.

Economics Concept Introduction

Introduction: Economies of scale are cost advantages that businesses reap when production is successful. By rising production and reducing costs, businesses can achieve economies of scale. It is because it spreads prices over a larger variety of products. The costs may be fixed as well as variable.

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Students have asked these similar questions

Given the total cost function of TC=1000+10Q^2 .and the ATC of 1000/Q+10Q .Find Q.point where ATC cuts the MC.

A small business woman has realized that for one of her products, if the price per unit is GH¢20 she can sell 300 units a day. On the other hand, if the price per unit is reduced to GH¢13, she can sell 440 units a day. From the accounting records, her accountant has estimated the fixed cost of production as GH₵2,000 with a variable cost per unit of GH¢10. (i). Find an expression relating price and output assuming it is linear. (ii). State the total cost function, assuming it is linear. (iii) Advise the business woman on the level of production at which she will breakeven.

Answer 2

Question

Chapter 9, Problem 1E

a)

To determine

To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

a)

Expert Solution

Explanation of Solution

In statistics the t-statistics is the ratio of the departure of a parameter's estimated value from its hypothesized value to its standard error. It is used via the Student's t-test in hypothesis testing. For a T test the T-statistic is used to determine whether the null hypothesis should be accepted or rejected.

These variables are tested at the statistically significant level of 5% that is 0.5.

Variable is significant, that is t value is larger than 0.025; the value of 0.025 is around 2. All the t values of variable are greater than the 2.00; hence, all values are significant in explaining the cause and effect relationship.

Economics Concept Introduction

Introduction: The Operating Expense Ratio (OER) is a measure of the cost of operating a piece of property compared with the property’s revenue. It is calculated by dividing the operating expense (minus depreciation) of a property by its gross operating revenue and is used to compare expenses of similar properties.

c)

To determine

To evaluate the conclusion about the existence of economies or diseconomies of scale in savings and loan associations in the northwest

c)

Expert Solution

Explanation of Solution

The cost analysis is concerned with determining the money value of inputs (labor, raw materials), referred to as the total cost of production which helps to determine the optimum production level.

It can be concluded here that cost and output relationship show that the shape of cost is U shaped, U shape of cost curve denotes that cost decreases up to the certain point and economies of scale ensues. After the certain level of output, economies of scale changes into diseconomies of scale.

Economics Concept Introduction

Introduction: Economies of scale are cost advantages that businesses reap when production is successful. By rising production and reducing costs, businesses can achieve economies of scale. It is because it spreads prices over a larger variety of products. The costs may be fixed as well as variable.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 9, Problem 1E

a)

To determine

To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

a)

Expert Solution

Explanation of Solution

In statistics the t-statistics is the ratio of the departure of a parameter's estimated value from its hypothesized value to its standard error. It is used via the Student's t-test in hypothesis testing. For a T test the T-statistic is used to determine whether the null hypothesis should be accepted or rejected.

These variables are tested at the statistically significant level of 5% that is 0.5.

Variable is significant, that is t value is larger than 0.025; the value of 0.025 is around 2. All the t values of variable are greater than the 2.00; hence, all values are significant in explaining the cause and effect relationship.

Economics Concept Introduction

Introduction: The Operating Expense Ratio (OER) is a measure of the cost of operating a piece of property compared with the property’s revenue. It is calculated by dividing the operating expense (minus depreciation) of a property by its gross operating revenue and is used to compare expenses of similar properties.

c)

To determine

To evaluate the conclusion about the existence of economies or diseconomies of scale in savings and loan associations in the northwest

c)

Expert Solution

Explanation of Solution

The cost analysis is concerned with determining the money value of inputs (labor, raw materials), referred to as the total cost of production which helps to determine the optimum production level.

It can be concluded here that cost and output relationship show that the shape of cost is U shaped, U shape of cost curve denotes that cost decreases up to the certain point and economies of scale ensues. After the certain level of output, economies of scale changes into diseconomies of scale.

Economics Concept Introduction

Introduction: Economies of scale are cost advantages that businesses reap when production is successful. By rising production and reducing costs, businesses can achieve economies of scale. It is because it spreads prices over a larger variety of products. The costs may be fixed as well as variable.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 9, Problem 1E

a)

To determine

To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

a)

Expert Solution

Explanation of Solution

In statistics the t-statistics is the ratio of the departure of a parameter's estimated value from its hypothesized value to its standard error. It is used via the Student's t-test in hypothesis testing. For a T test the T-statistic is used to determine whether the null hypothesis should be accepted or rejected.

These variables are tested at the statistically significant level of 5% that is 0.5.

Variable is significant, that is t value is larger than 0.025; the value of 0.025 is around 2. All the t values of variable are greater than the 2.00; hence, all values are significant in explaining the cause and effect relationship.

Economics Concept Introduction

Introduction: The Operating Expense Ratio (OER) is a measure of the cost of operating a piece of property compared with the property’s revenue. It is calculated by dividing the operating expense (minus depreciation) of a property by its gross operating revenue and is used to compare expenses of similar properties.

c)

To determine

To evaluate the conclusion about the existence of economies or diseconomies of scale in savings and loan associations in the northwest

c)

Expert Solution

Explanation of Solution

The cost analysis is concerned with determining the money value of inputs (labor, raw materials), referred to as the total cost of production which helps to determine the optimum production level.

It can be concluded here that cost and output relationship show that the shape of cost is U shaped, U shape of cost curve denotes that cost decreases up to the certain point and economies of scale ensues. After the certain level of output, economies of scale changes into diseconomies of scale.

Economics Concept Introduction

Introduction: Economies of scale are cost advantages that businesses reap when production is successful. By rising production and reducing costs, businesses can achieve economies of scale. It is because it spreads prices over a larger variety of products. The costs may be fixed as well as variable.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 1E

a)

To determine

To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

a)

Expert Solution

Explanation of Solution

In statistics the t-statistics is the ratio of the departure of a parameter's estimated value from its hypothesized value to its standard error. It is used via the Student's t-test in hypothesis testing. For a T test the T-statistic is used to determine whether the null hypothesis should be accepted or rejected.

These variables are tested at the statistically significant level of 5% that is 0.5.

Variable is significant, that is t value is larger than 0.025; the value of 0.025 is around 2. All the t values of variable are greater than the 2.00; hence, all values are significant in explaining the cause and effect relationship.

Economics Concept Introduction

Introduction: The Operating Expense Ratio (OER) is a measure of the cost of operating a piece of property compared with the property’s revenue. It is calculated by dividing the operating expense (minus depreciation) of a property by its gross operating revenue and is used to compare expenses of similar properties.

c)

To determine

To evaluate the conclusion about the existence of economies or diseconomies of scale in savings and loan associations in the northwest

c)

Expert Solution

Explanation of Solution

The cost analysis is concerned with determining the money value of inputs (labor, raw materials), referred to as the total cost of production which helps to determine the optimum production level.

It can be concluded here that cost and output relationship show that the shape of cost is U shaped, U shape of cost curve denotes that cost decreases up to the certain point and economies of scale ensues. After the certain level of output, economies of scale changes into diseconomies of scale.

Economics Concept Introduction

Introduction: Economies of scale are cost advantages that businesses reap when production is successful. By rising production and reducing costs, businesses can achieve economies of scale. It is because it spreads prices over a larger variety of products. The costs may be fixed as well as variable.

Answer 6

Chapter 9, Problem 1E

a)

To determine

To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

a)

Expert Solution

Explanation of Solution

In statistics the t-statistics is the ratio of the departure of a parameter's estimated value from its hypothesized value to its standard error. It is used via the Student's t-test in hypothesis testing. For a T test the T-statistic is used to determine whether the null hypothesis should be accepted or rejected.

These variables are tested at the statistically significant level of 5% that is 0.5.

Variable is significant, that is t value is larger than 0.025; the value of 0.025 is around 2. All the t values of variable are greater than the 2.00; hence, all values are significant in explaining the cause and effect relationship.

Economics Concept Introduction

Introduction: The Operating Expense Ratio (OER) is a measure of the cost of operating a piece of property compared with the property’s revenue. It is calculated by dividing the operating expense (minus depreciation) of a property by its gross operating revenue and is used to compare expenses of similar properties.

Answer 7

Chapter 9, Problem 1E

a)

To determine

To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

Answer 8

a)

Expert Solution

Explanation of Solution

In statistics the t-statistics is the ratio of the departure of a parameter's estimated value from its hypothesized value to its standard error. It is used via the Student's t-test in hypothesis testing. For a T test the T-statistic is used to determine whether the null hypothesis should be accepted or rejected.

These variables are tested at the statistically significant level of 5% that is 0.5.

Variable is significant, that is t value is larger than 0.025; the value of 0.025 is around 2. All the t values of variable are greater than the 2.00; hence, all values are significant in explaining the cause and effect relationship.

Answer 9

a)

Expert Solution

Answer 10

a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Introduction: The Operating Expense Ratio (OER) is a measure of the cost of operating a piece of property compared with the property’s revenue. It is calculated by dividing the operating expense (minus depreciation) of a property by its gross operating revenue and is used to compare expenses of similar properties.

Answer 13

c)

To determine

To evaluate the conclusion about the existence of economies or diseconomies of scale in savings and loan associations in the northwest

c)

Expert Solution

Explanation of Solution

The cost analysis is concerned with determining the money value of inputs (labor, raw materials), referred to as the total cost of production which helps to determine the optimum production level.

It can be concluded here that cost and output relationship show that the shape of cost is U shaped, U shape of cost curve denotes that cost decreases up to the certain point and economies of scale ensues. After the certain level of output, economies of scale changes into diseconomies of scale.

Economics Concept Introduction

Introduction: Economies of scale are cost advantages that businesses reap when production is successful. By rising production and reducing costs, businesses can achieve economies of scale. It is because it spreads prices over a larger variety of products. The costs may be fixed as well as variable.

Answer 14

c)

To determine

To evaluate the conclusion about the existence of economies or diseconomies of scale in savings and loan associations in the northwest

Answer 15

c)

Expert Solution

Explanation of Solution

The cost analysis is concerned with determining the money value of inputs (labor, raw materials), referred to as the total cost of production which helps to determine the optimum production level.

It can be concluded here that cost and output relationship show that the shape of cost is U shaped, U shape of cost curve denotes that cost decreases up to the certain point and economies of scale ensues. After the certain level of output, economies of scale changes into diseconomies of scale.

Answer 16

c)

Expert Solution

Answer 17

c)

Expert Solution

Answer 18

Expert Solution

Answer 19

Economics Concept Introduction

Introduction: Economies of scale are cost advantages that businesses reap when production is successful. By rising production and reducing costs, businesses can achieve economies of scale. It is because it spreads prices over a larger variety of products. The costs may be fixed as well as variable.

Answer 20

Ch. 9 - Prob. 1E Ch. 9 - Prob. 2E Ch. 9 - Prob. 3E Ch. 9 - Prob. 4E Ch. 9 - Prob. 5E Ch. 9 - Prob. 1.1CE Ch. 9 - Prob. 1.2CE Ch. 9 - Prob. 1.3CE Ch. 9 - Prob. 1.4CE Ch. 9 - Prob. 1.5CE

To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

To evaluate the variables that are statistically significant in explaining variations in the average operating expense ratio

Explanation of Solution

To evaluate the conclusion about the existence of economies or diseconomies of scale in savings and loan associations in the northwest

Explanation of Solution

Want to see more full solutions like this?

Chapter 9 Solutions