...File C5-207 July 2007 www.extension.iastate.edu/agdm Elasticity of Demand E lasticity of demand is an important variation on the concept of demand. Demand can be classified as elastic, inelastic or unitary. An elastic demand is one in which the change in quantity demanded due to a change in price is large. An inelastic demand is one in which the change in quantity demanded due to a change in price is small. The formula for computing elasticity of demand is: (Q1 – Q2) / (Q1 + Q2) (P1 – P2) / (P1 + P2) If the formula creates a number greater than 1, the demand is elastic. In other words, quantity changes faster than price. If the number is less than 1, demand is inelastic. In other words, quantity changes slower than price. If the number is equal to 1, elasticity of demand is unitary. In other words, quantity changes at the same rate as price. Close substitutes for a product affect the elasticity of demand. It another product can easily be substituted for your product, consumers will quickly switch to the other product if the price of your product rises or the price of the other product declines. For example, beef, pork and poultry are all meat products. The declining price of poultry in recent years has caused the consumption of poultry to increase, at the expense of beef and pork. So products with close substitutes tend to have elastic demand. Figure 1. Elastic demand Elastic Demand Elasticity of demand is illustrated in Figure 1. Note that a change in price...
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...File C5-207 July 2007 www.extension.iastate.edu/agdm Elasticity of Demand E lasticity of demand is an important variation on the concept of demand. Demand can be classified as elastic, inelastic or unitary. An elastic demand is one in which the change in quantity demanded due to a change in price is large. An inelastic demand is one in which the change in quantity demanded due to a change in price is small. The formula for computing elasticity of demand is: (Q1 – Q2) / (Q1 + Q2) (P1 – P2) / (P1 + P2) If the formula creates a number greater than 1, the demand is elastic. In other words, quantity changes faster than price. If the number is less than 1, demand is inelastic. In other words, quantity changes slower than price. If the number is equal to 1, elasticity of demand is unitary. In other words, quantity changes at the same rate as price. Close substitutes for a product affect the elasticity of demand. It another product can easily be substituted for your product, consumers will quickly switch to the other product if the price of your product rises or the price of the other product declines. For example, beef, pork and poultry are all meat products. The declining price of poultry in recent years has caused the consumption of poultry to increase, at the expense of beef and pork. So products with close substitutes tend to have elastic demand. Figure 1. Elastic demand Elastic Demand Elasticity of demand is illustrated in Figure 1. Note that a change in price...
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...curve and the budget line; (ii) a kink in an indifference curve; (iii) a “corner” where the consumer specializes in consuming just one good. Here is how you find a point of tangency if we are told the consumer’s utility function, the prices of both goods, and the consumer’s income. The budget line and an indifference curve are tangent at a point (x1 , x2 ) if they have the same slope at that point. Now the slope of an indifference curve at (x1 , x2 ) is the ratio −M U1 (x1 , x2 )/M U2 (x1 , x2 ). (This slope is also known as the marginal rate of substitution.) The slope of the budget line is −p1 /p2 . Therefore an indifference curve is tangent to the budget line at the point (x1 , x2 ) when M U1 (x1 , x2 )/M U2 (x1 , x2 ) = p1 /p2 . This gives us one equation in the two unknowns, x1 and x2 . If we hope to solve for the x’s, we need another equation. That other equation is the budget equation p1 x1 + p2 x2 = m. With these two equations you can solve for (x1 , x2 ).∗ Example: A consumer has the utility...
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...Chapter 6: CPU Scheduling • • • Basic Concepts Scheduling Criteria Scheduling Algorithms Operating System Concepts 6.1 Basic Concepts • Maximum CPU utilization obtained with multiprogramming. • CPU–I/O Burst Cycle – Process execution consists of a cycle of CPU execution and I/O wait. – Example: Alternating Sequence of CPU And I/O Bursts – In an I/O – bound program would have many very short CPU bursts. – In a CPU – bound program would have a few very long CPU bursts. Operating System Concepts 6.2 1 CPU Scheduler • The CPU scheduler (short-term scheduler) selects from among the processes in memory that are ready to execute, and allocates the CPU to one of them. • A ready queue may be implemented as a FIFO queue, priority queue, a tree, or an unordered linked list. • CPU scheduling decisions may take place when a process: 1. Switches from running to waiting state (ex., I/O request). 2. Switches from running to ready state (ex., Interrupts occur). 3. Switches from waiting to ready state (ex., Completion of I/O). 4. Terminates. • Scheduling under 1 and 4 is nonpreemptive; otherwise is called preemptive. • Under nonpreemptive scheduling, once the CPU has been allocated to a process, the process keeps the CPU until it releases the CPU either by terminating or by switching to the waiting state. Operating System Concepts 6.3 Dispatcher • Dispatcher module gives control of the CPU to the process selected by the short-term scheduler;...
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...computer It estimates that it will take competitors at least two yeas to produce equivalent products. The demand function for the computer has been estimated to be P = 2,500 - .0005Q The marginal (and average variable) cost of producing the computer is $900. a. Compute the profit-maximizing price and output levels assuming Pear acts as a monopolist for its product. Answer: The monopolist would equate marginal revenue (MR) with marginal cost (MC) Total revenue (TR) = P*Q = 2500Q-Q^2 MR = dTR/dQ = 2500-2Q We have MC = 900 So MR= MC implies 2500-2Q= 900, implies monopoly output Q* = 800 (in units of 100) And monopoly price P = 2500-0.0005*800 = 2499.6 b. Determine the total contribution to profits and fixed costs from the solution generated in part (a). Answer: Total profit = P*Q-MC*Q = 800*2499.6 900*800 = $ 1279680 (in units of 100) Pear Computer is considering an alternative pricing strategy of sliding down the demand curve. It plans to set the following schedule of prices over the coming two ------------------------------------------------- years. Branding Iron Products, a specialty steel fabricator, operates a plant in the town of West Star, Texas. The town has grown rapidly because of recent discoveries of oil and gas in the area town. Many of the new residents have expressed concerns at the amount of pollution (primarily particulate matter in the air and waste water in the town's rivers) emitted by Branding Iron. Three proposals...
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...CPU SCHEDULINGCPU scheduling in UNIX is designed to benefit interactive processes. Processes are given small CPU time slices by a priority algorithm that reduces to round-robin scheduling for CPU-bound jobs.The scheduler on UNIX system belongs to the general class of operating system schedulers known as round robin with multilevel feedback which means that the kernel allocates the CPU time to a process for small time slice, preempts a process that exceeds its time slice and feed it back into one of several priority queues. A process may need much iteration through the "feedback loop" before it finishes. When kernel does a context switch and restores the context of a process. The process resumes execution from the point where it had been suspended.Each process table entry contains a priority field. There is a process table for each process which contains a priority field for process scheduling. The priority of a process is lower if they have recently used the CPU and vice versa.The more CPU time a process accumulates, the lower (more positive) its priority becomes, and vice versa, so there is negative feedback in CPU scheduling and it is difficult for a single process to take all the CPU time. Process aging is employed to prevent starvation.Older UNIX systems used a 1-second quantum for the round- robin scheduling. 4.33SD reschedules processes every 0.1 second and recomputed priorities every second. The round-robin scheduling is accomplished by the -time-out mechanism, which tells...
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...|[pic] | |Author(s): Nathan McCray |Date: 06/24/2013 | |Title of Lesson: Kepler’s 3rd Law (Law of planetary motion) |Grade Level: 8 – 12+ | |Core Components | |Subject, Content Area or Topic: | |Physics, Electronics, Science, Math | |National/State Standards: (Assign as needed based on your state standards) | | | | | |Common Core Standards: (Assign as needed based on your state requirements) | ...
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...Case Studies 1. SOLUTION TO STARTING RIGHT CASE, CH. 3, PAGE 110 This is a decision-making-under-uncertainty case. There are two events: a favorable market (event 1) and an unfavorable market (event 2). There are four alternatives, which include do nothing (alternative 1), invest in corporate bonds (alternative 2), invest in preferred stock (alternative 3), and invest in common stock (alternative 4). The decision table is presented. Note that for alternative 2, the return in a good market is $30,000 (1 + 0.13)5 = $55,273. The return in a good market is $120,000, (4 x $30,000) for alternative 3, and $240,000, (8 x $30,000) for alternative 4. Payoff table Laplace Event 1 Alternativ e1 Alternativ e2 Alternativ e3 Alternativ e4 0 55,273 Event 2 0 – 10,00 0 – 15,00 0 – 30,00 0 Average Value 0.0 22,636.5 Minimu m 0 – 10,000 – 15,000 – 30,000 Maximu m 0 55,273 Hurwicz Value 0.00 – 2,819.9 7 –150.00 120,00 0 240,00 0 52,500.0 120,000 105,000. 0 240,000 –300.00 Regret table Maximum Alternative Alternative 1 Alternative 2 Alternative 3 Alternative 4 Event 1 240,000 184,727 120,000 0 Event 2 0 10,000 15,000 30,000 Regret 240,000 184,727 120,000 30,000 a. Sue Pansky is a risk avoider and should use the maximin decision approach. She should do nothing and not make an investment in Starting Right. b. Ray Cahn should use a coefficient of realism of 0.11. The best decision is to do nothing. c. Lila Battle should eliminate alternative 1 of doing nothing and apply the maximin...
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...Portfolio Modeling and Evaluation: Beating the Market ABSTRACT During the period of 2005 to 2010, the market portfolio (P1) and one suggested portfolio (P3) post a positive absolute return of 0.80% and 0.82% respectively which underperformed the active fund portfolio (P2) 0.91%. This report follows various modeling methods in order to back test the performance of the active fund portfolio and compare its performance with that of two other portfolios. The findings indicate that, even though P2 achieves the highest return on the overall performance, the limitations such as the macro environment, the assumptions set, and the Shrinkage method used that accidentally downsizes some valuable stocks in out-‐samples as they are closely correlated are being ignored. By contrast, P3 will probably offer a “middle-‐choice” which will bring a promising and more stable return. 1 Portfolio...
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...Week 3 Laboratory Week 3 Lab Part 1: Automate Digital Evidence Discovery Using Paraben’s P2 Commander Learning Objectives and Outcomes Upon completing this lab, students will be able to complete the following tasks: * Open an existing case file using P2 Commander * Analyze the data in the image and the files saved in the case * Sort and identify evidence file types in a case using Paraben's P2 Commander forensic tool * Use P2 Commander to identify information for potential evidence contained in chat logs such as Skype chat * Analyze the contents of user profiles and data using the P2 Commander browser Week 3 Lab Part 1 - Assessment Worksheet Overview View the Demo Lab available in the Practice section of Learning Space Unit 5 and then answer the questions below. The video will demonstrate the use of Paraben's P2 Commander and outline the different forensics capabilities of the tool. Lab Assessment Questions & Answers 1. When talking about Information Security, what does the 'CIA' stands for? CIA in information security stands for confidentiality, integrity and availability. 2. When would it be a good practice to classify data? It would be a good practice to classify data when you need to extract files from a hard drive or system for investigating in order to accurately organize the findings. 3. What is Security classification? Security classification is the security level assigned to a government document, file...
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...Case Studies 1. SOLUTION TO STARTING RIGHT CASE, CH. 3, PAGE 110 This is a decision-making-under-uncertainty case. There are two events: a favorable market (event 1) and an unfavorable market (event 2). There are four alternatives, which include do nothing (alternative 1), invest in corporate bonds (alternative 2), invest in preferred stock (alternative 3), and invest in common stock (alternative 4). The decision table is presented. Note that for alternative 2, the return in a good market is $30,000 (1 + 0.13)5 = $55,273. The return in a good market is $120,000, (4 x $30,000) for alternative 3, and $240,000, (8 x $30,000) for alternative 4. Payoff table Laplace Hurwicz Event 1 Event 2 Average Value Minimu m Maximu m Value Alternativ e1 0 0 0.0 0 0 0.00 Alternativ e2 55,273 – 10,00 0 22,636.5 – 10,000 55,273 – 2,819.9 7 Alternativ e3 120,00 0 – 15,00 0 52,500.0 – 15,000 120,000 –150.00 Alternativ e4 240,00 0 – 30,00 0 105,000. 0 – 30,000 240,000 –300.00 Regret table Maximum Alternative Event 1 Event 2 Regret Alternative 1 240,000 0 240,000 Alternative 2 184,727 10,000 184,727 Alternative 3 120,000 15,000 120,000 Alternative 4 0 30,000 30,000 a. Sue Pansky is a risk avoider and should use the maximin decision approach. She should do nothing and not make an investment in Starting...
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...Chapter 1 Microeconomics of Consumer Theory The two broad categories of decision-makers in an economy are consumers and firms. Each individual in each of these groups makes its decisions in order to achieve some goal – a consumer seeks to maximize some measure of satisfaction from his consumption decisions while a firm seeks to maximize its profits. We first consider the microeconomics of consumer theory and will later turn to a consideration of firms. The two theoretical tools of consumer theory are utility functions and budget constraints. Out of the interaction of a utility function and a budget constraint emerge the choices that a consumer makes. Utility Theory A utility function describes the level of “satisfaction” or “happiness” that a consumer obtains from consuming various goods. A utility function can have any number of arguments, each of which affects the consumer's overall satisfaction level. But it is only when we consider more than one argument can we consider the trade-offs that a consumer faces when making consumption decisions. The nature of these trade-offs can be illustrated with a utility function of two arguments, but is completely generalizable to the case of any arbitrary number of arguments.1 An advantage of considering the case of just two goods is that we can analyze it graphically because, recall, graphing a function of two arguments requires three dimensions, graphing a function of three arguments requires four dimensions, and, in general, graphing...
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...Jinwoo Kim 1 Contents 1 The Market 4 2 Budget Constraint 8 3 Preferences 10 4 Utility 14 5 Choice 18 6 Demand 24 7 Revealed Preference 27 8 Slutsky Equation 30 9 Buying and Selling 33 10 Intertemporal Choice 37 12 Uncertainty 39 14 Consumer Surplus 43 15 Market Demand 46 18 Technology 48 19 Profit Maximization 52 20 Cost Minimization 54 21 Cost Curves 57 22 Firm Supply 59 23 Industry Supply 62 24 Monopoly 64 2 25 Monopoly Behavior 67 26 Factor Market 72 27 Oligopoly 76 28 Game Theory 80 30 Exchange 85 3 Ch. 1. The Market I. Economic model: A simplified representation of reality A. An example – Rental apartment market in Shinchon: Object of our analysis – Price of apt. in Shinchon: Endogenous variable – Price of apt. in other areas: Exogenous variable – Simplification: All (nearby) Apts are identical B. We ask – How the quantity and price are determined in a given allocation mechanism – How to compare the allocations resulting from different allocation mechanisms II. Two principles of economics – Optimization principle: Each economic agent maximizes its objective (e.g. utility, profit, etc.) – Equilibrium principle: Economic agents’ actions must be consistent with each other III. Competitive market A. Demand – Tow consumers with a single-unit demand whose WTP’s are equal to r1 and r2 (r1 < r2 ) p r2 r1 ...
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... , P1 = 8, P2 = 2, m = 32 1. How many units of good 2 will you buy? What is your maximum utility level? 2. Calculate for the Hicksian Demand Function of Good 2 3. Suppose the price of good 2 increases to Php 4, ceteris paribus. a. Calculate the Substitution Effect of the Increase in the Price of Good 2 b. Calculate the Income Effect of the Increase in the Price of Good 2 c. What is the compensation after the increase in the price of good 2 is necessary to restore your utility to its original level? Briefly discuss what is going on as you answer this question? 4. Calculate the compensating variation of the increase of P2 to Php 4 5. Calculate the equivalent variation of the increase of P2 to Php 4 6. Calculate the change in Marshallian Consumer Surplus of the increase of P2 to Php 4 II. Given X1* = ! "' − %&"' "# , P1 = 2, P2 = 4, m = 32 1. Calculate the uncompensated own-price elasticity of demand for good 1. Is the demand for good 1 price elastic, inelastic or unit elastic? Why? 2. Calculate the uncompensated cross price elasticity for good 1 with respect to P2. Interpret your result. 3. Calculate the uncompensated cross price elasticity of demand for good 2 with respect to P1. Interpret your result. 4. Calculate the income elasticity of demand for good 1. Is good 1 normal or inferior? [If good 1 is normal, is it a luxury or a necessity?] 5. Calculate the compensated cross-price elasticity of demand for good 1 with respect to P2 6. Calculate...
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...principles leading up to our use of logarithms. Unless otherwise stated, we will be working solely with logarithms that are in base 10 (Briggsian) . Some useful relationships to remember when working with logarithms are: 1. y = 10x then log10 ( y ) = x 2. log ( xy ) = log ( x ) + log ( y ) ⎛x⎞ 3. log ⎜ ⎟ = log ( x ) − log ( y ) ⎝ y⎠ ( ) 4. 10 log x n = n10 log( x ) Intensity Level In the last lesson, we defined the time average intensity in relation to the time average or rms pressure as well as the maximum acoustic pressure. p2 p2 I = = max 2ρc ρc The intensity is a useful quantity because it quantifies the power in an acoustic wave, but because of the large variation in magnitudes of Intensity, it is more useful to use logarithms to compare intensities. The below table demonstrates the wide variation in Intensity for typical sounds in air. We will start by defining a new quantity, L, the intensity level, which has units of dB. I L ≡ 10 log I0 where: is the time average intensity of the sound wave. I0 is the reference level used for comparison purposes. 3-1 Source Intensity (W/m2) Intensity Level (dB) Jet Plane 100 140 Pain Threshold 1 120 Siren 1x10-2 100 Busy Traffic 1x10-5 70 Conversation 3x10-6 65 Whisper 1x10-10 20 Rustle of leaves 1x10-11 10 Hearing Threshold 1x10-12 1 The reference intensity in air is typically 1 x 10-12 W/m2. Using this simple...
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