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Input the following data into Excel

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Input the following data into Excel.

6)            Assume that Q = quantity of pizza, Price = price of pizza (in cents), Tuition = tuition (in thousands of dollars), Price of Soft Drink = price of soft drinks (in cents):

 

Q             Price                       Tuition                    Price of Soft Drink

 

10           100                         14                           120        

12           100                         16                             95        

13             90                           8                            110        

14             95                           7                              90        

  9            110                         11                           100        

  8            125                           5                            100        

  4            125                         12                           125        

  3            150                         10                           150        

15             80                         18                           100        

12             80                         12                             90        

13             90                           6                              80        

15           100                           5                              75        

12           110                         13                           100        

10           110                         10                           125        

10           125                         14                           130        

12           110                         15                             80        

11           150                         16                             90        

12           100                         12                             95        

10           150                         12                           100        

  8            160                         10                             90        

  9            150                         13                             95        

10           135                         15                           100        

11           125                         16                             95        

12           100                         17                           100        

13             75                         10                           100        

10           100                         12                           110        

  9            110                           6                            125        

  8            125                         10                             90        

  8            150                           5                              80        

  4            100                         10                             95        

 

a)            Estimate the linear demand function with Q as the dependent variable and Price as the independent variable. Comment fully on the results and discuss the identification problem.

b)            Estimate the linear demand function with Q as the dependent variable and Price, Tuition, Price of Soft Drinks, as

                the independent variables. Comment fully on the results.

c)             Take the natural logarithm of all the variables and estimate the new demand function. Comment fully on the

                results. What is the value of the price elasticity of demand? What is the value of the cross-price elasticity of

                demand? 

 

 

 

Input the following data into Excel.

7)            Assume we have the following time series data on variable Y below:

YEAR                       Y

1953                       482

1954                       312

1955                       1221

1956                       1800

1957                       2419

1958                       2958

1959                       3454

1960                       3897

1961                       4317

1962                       4705

1963                       5056

1964                       5378

1965                       5681

1966                       5964

1967                       6216

1968                       6425

1969                       6632

1970                       6836

1971                       7003

1972                       7170

1973                       7315

1974                       7456

1975                       7595

1976                       7715

1977                       7815

1978                       7918

1979                       7995

1980                       8079

1981                       8164

1982                       8239

1983                       8292

1984                       8355

1985                       8402

1986                       8461

1987                       8493

1988                       8539

1989                       8561

1990                       8609

1991                       8649

1992                       8660

1993                       8680

1994                       8726

1995                       8740

1996                       8760

1997                       8783

1998                       8805

1999                       8812

2000                       8854

2001                       8841

2002                       8869

2003                       8893

2004                       8883

2005                       8888

2006                       8904

2007                       8913

2008                       8913

2009                       8923

2010                       8948

2011                       8962

 

a)            Fit a simple trend model to the time series data and discuss the findings.

b)            Fit a quadratic trend model to the time series and discuss the findings: (square time).

c)             Compare your results in part (b) to part (a) and use the best of the two models to forecast 2012 and 2013 values

                of Y.