Table shows the demand schedule for Lin’s Fortune Cookies. Table shows some cost data for Lin’s. Use this information to work Problems (Hint: Make a sketch of Lin’s shortrun cost curves.)
Price (dollars per batch) 
Quantity demanded (batches per day) 
50 
0 
50 
1 
50 
2 
50 
3 
50 
4 
50 
5 
50 
6 
Quantity (batches per day) 
AFC 
AVC 
ATC 
MC 

(dollars per batch) 

1 
84.0 
51.0 
135 





37 
2 
42.0 
44.0 
86 





29 
3 
28.0 
39.0 
67 





27 
4 
21.0 
36.0 
57 





32 
5 
16.8 
35.2 
52 





40 
6 
14.0 
36.0 
50 





57 
7 
12.0 
39.0 
51 





83 
8 
10.5 
44.5 
55 

At a market price of $50 a batch, what quantity does Lin’s produce and what is the firm’s economic profit in the short run?
Test—CI connection In exercise 1, explain how the result of the 99% confidence interval in part b corresponds to the result of the decision using significance level 0.01 in part c.
Exercise 1
Time spent on Internet In 2006, the General Social Survey asked about the number of hours a week spent on the World Wide Web (variable denoted WWWTIME). Some results are as follows:
Group  N  Mean  StDev  SE Mean 
Male  1196  6.2  9.9  0.285 
Female  1569  4.9  8.6  0.216 
Difference = mu(Male) − mu(Female)  
Estimate for difference: 1.3  
99% CI for difference: (0.4. 2.2)  
TTest of difference = 0 (vs not =):  
Tvalue = 3.62 Pvalue = 0.000 
a. Identify the response variable and explanatory variable. Indicate whether each variable is quantitative or categorical.
b. Report and interpret the 99% confidence interval shown for the difference between the population means for males and females.
c. Report and interpret the steps of the significance test comparing the two population means. Make a decision, using significance level 0.01.
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