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    Probability: Are employment and economic trend independent?

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    Consider the following two economic characteristics with two possible outcomes each: employment (increase, decrease) and economic trend (positive, negative). Let the probability of a decreasing employment be 0.6 and the probability of a positive economic trend 0.5. Further, assume that the probability of a decreasing employment given a negative economic trend is 0.7.

    Determine the probability of a positive economic trend given an increasing employment. Are employment and economic trend independent?

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    https://brainmass.com/statistics/probability/probability-employment-economic-trend-independent-320798

    Solution Preview

    A competitive firm estimates its average variable cost function to be .
    AVC=125-.21Q+.0007Q^2(squared)

    The firm's total fixed cost is $3,500.
    a. The marginal cost function associated with this average variable cost function is
    SMC =__________________________.

    a. The firm's total cost, TC = TFC +TVC

    Or, TC = TFC + AVC.Q

    Or, TC =3500 + (125 -0.21Q+ 0.0007Q2).Q

    MC = d(TC)/dQ = 125 - 0.42Q + 0.0021Q2

    b. AVC reaches its minimum at __150____ units of output. Minimum AVC is ___109.25______.

    d(AVC)/dQ = o when AVC is at minimum

    So, ...

    Solution Summary

    This solution helps with a probability problem regarding employment and economic trends.

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