FREC 444 – Economics of Environmental Management
Background Quiz

1. Please use a 0-to-10 scale to indicate your experience in each of the following categories (0=none; 10=extensive):

microcomputer spreadsheets _____
creating WWW pages _____
UNIX _____
SAS _____
Calculus _____
Statistics _____
Ecology _____
environmental activism _____

2. The market demand schedule for tongs is Q = 100 – P; the market supply schedule is Q = -50 + 2P. Calculate:

the market equilibrium P and Q for tongs;
the price elasticities of demand and supply at that equilibrium point;
the producer and consumer surpluses.

3. Research on NHL player salaries has yielded the following regression model, where

SALARY = player’s base contract salary in $thousands
YRS = number of years in NHL
PTS = goals plus assists in prior season
PNLTY = total minutes of game penalties assessed in prior season
PNLTYSQ = total penalty minutes in prior season squared
Coefficient t-statistics are reported in square brackets.

 
  SALARY = 105.4 + 42.6 (YRS) + 6.6 (PTS) + 4.1 (PNLTY) - 0.026 (PNLTYSQ)
           [3.66]  [1.05]      [2.41]      [4.60]        [-2.07]
 
                                N = 244 players                 R-Square = 68.6

Which model coefficients are NOT significantly different from zero at the 90% confidence level?
According to this model, what is the salary-maximizing level of penalty minutes, ceteris paribus?