Supply Chain Final
Name: Work independently!!!!
1. To answer questions, copy and paste essential charts and excel results into this word file, and explain in details.
2. After you finish, send this word file and your excel spreadsheets to
Problem 1. (50pts)
From microeconomic theory it is known that the demand for a commodity generally depends on the income of the consumer, the real price of the commodity, and the real price of complementary or competing products. Chicken.xls includes the per capita consumption of chicken (in pounds) in the United States for 1960-1982 along with disposable income per capita (in dollars) and the retail prices for chicken, pork, and beef (in cents).
A research firm specializing in agricultural economics has recruited you. Your first assignment is to assist one of the principals in the firm with a study for a chicken franchise on the price elasticities for various meat products.
(1.1) Plot chicken consumption vs. chicken price and calculate the correlation coefficient between these two variables. Describe the relationship. Does it make economic sense? Offer your explanation briefly. (10pts.) As price increases consumption increases but this is correct as income increases as well. Eventually, consumption levels off, as the increasing wealth means people spend their money on other meats instead of chicken. The correlation coefficient =.794, which means this does have a positive linear correlation.
(1.2) Run a linear regression:
Chicken price vs. consumption Chicken w/beef+pork+ beef
Chicken consumption over time increases
Chicken consumption=b0+b1*Income+b2*chicken price+b3*pork price+b4*beef price
What’s the estimated regression equation? (5pts.)
(1.3) Identify significant and insignificant variables. Does the chicken consumption statistically depend on the beef and pork prices and the income? Give the statistical reason briefly (p-value). (5pts.)
Significant=chicken
1. To answer questions, copy and paste essential charts and excel results into this word file, and explain in details.
2. After you finish, send this word file and your excel spreadsheets to
Problem 1. (50pts)
From microeconomic theory it is known that the demand for a commodity generally depends on the income of the consumer, the real price of the commodity, and the real price of complementary or competing products. Chicken.xls includes the per capita consumption of chicken (in pounds) in the United States for 1960-1982 along with disposable income per capita (in dollars) and the retail prices for chicken, pork, and beef (in cents).
A research firm specializing in agricultural economics has recruited you. Your first assignment is to assist one of the principals in the firm with a study for a chicken franchise on the price elasticities for various meat products.
(1.1) Plot chicken consumption vs. chicken price and calculate the correlation coefficient between these two variables. Describe the relationship. Does it make economic sense? Offer your explanation briefly. (10pts.) As price increases consumption increases but this is correct as income increases as well. Eventually, consumption levels off, as the increasing wealth means people spend their money on other meats instead of chicken. The correlation coefficient =.794, which means this does have a positive linear correlation.
(1.2) Run a linear regression:
Chicken price vs. consumption Chicken w/beef+pork+ beef
Chicken consumption over time increases
Chicken consumption=b0+b1*Income+b2*chicken price+b3*pork price+b4*beef price
What’s the estimated regression equation? (5pts.)
(1.3) Identify significant and insignificant variables. Does the chicken consumption statistically depend on the beef and pork prices and the income? Give the statistical reason briefly (p-value). (5pts.)
Significant=chicken