Bmme5103 Jan 2006

INSTRUCTION: Answer ALL Questions. QUESTION 1 A typical consumer behaved in the following manner with respect to purchases of persist in over the past eight years: obs 1998 1999 2000 2001 2002 2003 2004 2005 QBUT 150.0000 175.0000 190.0000 170.0000 200.0000 190.0000 180.0000 200.0000 = = = = PBUT 0.990000 0.990000 0.990000 1.150000 1.100000 1.100000 1.100000 0.950000 PMARG 0.650000 0.900000 0.900000 0.900000 0.900000 0.650000 0.650000 0.650000 INC 10500.00 10500.00 11500.00 11500.00 11500.00 11500.00 11000.00 11000.00 where QBUT PBUT PMARG INC per capita consumption of spawn (kg) price of butter (RM/kg) price of margarine (RM/kg) per capita income (RM) The estimated demand equations for butter in some(prenominal) ana put downue and multiplicative (non-linear) functional forms as well as the descriptive statistics atomic number 18 shown in icon 1. a. Evaluate the estimated demand equations in both functional forms and which ane is better to represent the demand for butter. (10 marks) b. From the linear demand function, project the price, income and cross-elasticity coefficients based on the variable middling values. (6 marks) c. From the non-linear demand function, encipher the price, income and crosselasticity coefficients. (6 marks) d. If the price of butter and margarine await the same as in 2005, and the income increase by 5.

6% of the 2005 values, (i) visualise the per capita consumption of butter in 2006; and (ii) forecast the 95% confidence interval forecast in 2006. (10 marks) [TOTAL: 32 MARKS] 1 QUESTION 2 The crossingion function of a product with respect to its labour input is as follo! ws: return 6 16 29 44 55 60 62 62 60 53 Labour 1 2 3 4 5 6 7 8 9 10 Where Q L: L2 LQ LL = = = = = output (tonne) labour (number) nifty of the number of workers natural pound of output natural log of the number of workers a. The estimated production functions in various functional forms are presented in Figure 2. Choose the best estimated equation that represents the...If you hope to get a full essay, order it on our website: OrderCustomPaper.com

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