A Financier Whose Specialty Is Investing in Movie Productions Has

question 48

Essay

A financier whose specialty is investing in movie productions has observed that, in general, movies with 'big-name' stars seem to generate more revenue than those movies whose stars are less well known. To examine his belief, he records the gross revenue and the payment (in $ million) given to the two highest-paid performers in the movie for 10 recently released movies. $$\begin{array} { | c | c | c | } \hline \text { Movie } & \begin{array} { c } \text { Cost of two highest- } \\\text { paid performers } ( \$ \mathrm {~m} )\end{array} & \begin{array} { c } \text { Gross revenue } \\( \$ \mathrm {~m} )\end{array} \\\hline 1 & 5.3 & 48 \\\hline 2 & 7.2 & 65 \\\hline 3 & 1.3 & 18 \\\hline 4 & 1.8 & 20 \\\hline 5 & 3.5 & 31 \\\hline 6 & 2.6 & 26 \\\hline 7 & 8.0 & 73 \\\hline 8 & 2.4 & 23 \\\hline 9 & 4.5 & 39 \\\hline 10 & 6.7 & 58 \\\hline\end{array}$$ a. Determine the least squares regression line.
b. Interpret the value of the slope of the regression line.
c. Determine the standard error of estimate, and describe what this statistic tells you about the regression line.

Understand the concept of tax incidence and how the tax burden is distributed between buyers and sellers.

Evaluate the effects of subsidies and how they differ from price controls.

Comprehend how taxes affect supply and demand curves and market equilibrium.

Understand the economic rationales for taxing specific goods, such as environmental concerns.

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Definitions:

Conservative

Favoring traditional views and values; tending to resist change or cautious in approach.

Realistic

Having or showing a practical awareness of things as they are; understanding and accepting the physical limitations or the truth of a situation.

Bullish

An attitude or belief that a particular stock, asset, or market is about to rise in value.

Feasibility Study

An assessment of the practicality and potential success of a proposed project or business, analyzing variables such as cost, risk, and benefits.