Question 1

If a consumer increases her quantity of ice cream consumed by 100% when her income rises by 25%, then her income elasticity of demand for ice cream is

Accepted Answer

A) 8.0. 
B) 4.0. 
C) .25. 
D) .08. 
A) 8.0. 
B) 4.0. 
C) .25. 
D) .08.

Question 2

If the demand curve is given by Q = a + bp, then b is

Accepted Answer

A) positive. 
B) the quantity demanded when price is zero. 
C) the change in quantity demanded if price changes by 1. 
D) different at different points on the demand curve. 
A) positive. 
B) the quantity demanded when price is zero. 
C) the change in quantity demanded if price changes by 1. 
D) different at different points on the demand curve.

Question 3

When a variable is determined by a factor outside of the function or model being evaluated, it is said to be

Accepted Answer

A) endogenous. 
B) exogenous. 
C) unexplained. 
D) statistically insignificant. 
A) endogenous. 
B) exogenous. 
C) unexplained. 
D) statistically insignificant.

Question 4

A regression analysis with ________ explanatory variables is called a ________.

Accepted Answer

A) two or less; limited regression 
B) exactly two; binomial least squares regression 
C) one; dependent regression 
D) two or more; multivariate regression 
A) two or less; limited regression 
B) exactly two; binomial least squares regression 
C) one; dependent regression 
D) two or more; multivariate regression

Question 5

In Ordinary Least Squares Regression, the gap between the value of the dependent variable and the predicted value is called

Accepted Answer

A) the error term. 
B) the minimizing coefficient. 
C) the residual. 
D) the explanatory variable. 
A) the error term. 
B) the minimizing coefficient. 
C) the residual. 
D) the explanatory variable.

Question 6

The elasticity of demand is

Accepted Answer

A) measured in money (e.g., dollars). 
B) measured in units of the good (e.g., slices of pizza). 
C) unitless. 
D) measured in money/unit (e.g., 1.50 $/slice of pizza). 
A) measured in money (e.g., dollars). 
B) measured in units of the good (e.g., slices of pizza). 
C) unitless. 
D) measured in money/unit (e.g., 1.50 $/slice of pizza).

Question 7

A regression specification must include

Accepted Answer

A) the choice of the dependent variable. 
B) the explanatory variable(s). 
C) the functional relationship. 
D) All of the above. 
A) the choice of the dependent variable. 
B) the explanatory variable(s). 
C) the functional relationship. 
D) All of the above.

Question 8

If an estimated regression explains none of the variation, R2 will be

Accepted Answer

A) 0. 
B) between 0 and 1. 
C) 1. 
D) unable to determine with the information given. 
A) 0. 
B) between 0 and 1. 
C) 1. 
D) unable to determine with the information given.

Question 9

If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, using the formula for arc price elasticity what is the percentage change in quantity?

Accepted Answer

A) -18.18% 
B) -29.89% 
C) -26% 
D) -35.14% 
A) -18.18% 
B) -29.89% 
C) -26% 
D) -35.14%

Question 10

Ordinary Least Squares Regression analysis attempts to

Accepted Answer

A) maximize the distance of each point from a regression line. 
B) select a line that fits the data well. 
C) maximize the residual. 
D) change a multivariate problem into a single dimension. 
A) maximize the distance of each point from a regression line. 
B) select a line that fits the data well. 
C) maximize the residual. 
D) change a multivariate problem into a single dimension.

Question 11

If we have a small standard error, then

Accepted Answer

A) the estimated coefficient is small. 
B) the true demand function has imprecise coefficients. 
C) the expected variation of the estimated coefficient is small. 
D) the estimated coefficients are imprecise indicators of the true values. 
A) the estimated coefficient is small. 
B) the true demand function has imprecise coefficients. 
C) the expected variation of the estimated coefficient is small. 
D) the estimated coefficients are imprecise indicators of the true values.

Question 12

If demand is elastic

Accepted Answer

A) then it changes very little in response to a price change. 
B) then it changes significantly in response to a price change. 
C) then demand is zero. 
D) then demand is infinite. 
A) then it changes very little in response to a price change. 
B) then it changes significantly in response to a price change. 
C) then demand is zero. 
D) then demand is infinite.

Question 13

If two variables B and V are positively correlated, B ________ when V ________.

Accepted Answer

A) goes up; goes down 
B) goes up; goes up 
C) goes down; goes up 
D) remains unchanged; goes up 
A) goes up; goes down 
B) goes up; goes up 
C) goes down; goes up 
D) remains unchanged; goes up

Question 14

The cross price elasticity of demand for a good is the percentage change in the quantity demanded in response to a given percentage change in

Accepted Answer

A) income. 
B) the price of that good. 
C) the price of another good. 
D) the quantity demanded of another good. 
A) income. 
B) the price of that good. 
C) the price of another good. 
D) the quantity demanded of another good.

Question 15

Sometimes distinct patterns around a trend line can be caused by

Accepted Answer

A) poor underlying data. 
B) dummy variables. 
C) seasonal variation. 
D) statistical anomalies. 
A) poor underlying data. 
B) dummy variables. 
C) seasonal variation. 
D) statistical anomalies.

Question 16

What is the meaning of the statement "correlation does not mean causation"?

Accepted Answer

Just because two variables are correlate

Question 17

When a variable is determined by a factor inside of the function or model being evaluated, it is said to be

Accepted Answer

A) endogenous. 
B) exogenous. 
C) unexplained. 
D) statistically insignificant. 
A) endogenous. 
B) exogenous. 
C) unexplained. 
D) statistically insignificant.

Question 18

If two variables B and V are negatively correlated, B ________ when V ________.

Accepted Answer

A) goes up; goes down 
B) goes up; goes up 
C) goes down; goes down 
D) remains unchanged; goes down 
A) goes up; goes down 
B) goes up; goes up 
C) goes down; goes down 
D) remains unchanged; goes down

Question 19

An estimated demand curve does NOT necessarily match actual data perfectly because

Accepted Answer

A) it is not possible to accurately calculate the coefficients of the curve. 
B) some factors that are not measured or observed may affect the curve. 
C) the random error term has too large of a range. 
D) demand is unpredictable. 
A) it is not possible to accurately calculate the coefficients of the curve. 
B) some factors that are not measured or observed may affect the curve. 
C) the random error term has too large of a range. 
D) demand is unpredictable.

Question 20

If the demand curve for slices of pizza is given as Q = 300 - 16p, then the point elasticity of demand when price is $1.50 is

Accepted Answer

A) -24. 
B) -16. 
C) -0.0054. 
D) -0.087. 
A) -24. 
B) -16. 
C) -0.0054. 
D) -0.087.

If a consumer increases her quantity of ice cream consumed by 100% when her income rises by 25%, then her income elasticity of demand for ice cream is

If the demand curve is given by Q = a + bp, then b is

When a variable is determined by a factor outside of the function or model being evaluated, it is said to be

A regression analysis with explanatory variables is called a .

In Ordinary Least Squares Regression, the gap between the value of the dependent variable and the predicted value is called

The elasticity of demand is

A regression specification must include

If an estimated regression explains none of the variation, R2 will be

If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, using the formula for arc price elasticity what is the percentage change in quantity?

Ordinary Least Squares Regression analysis attempts to

If we have a small standard error, then

If demand is elastic

If two variables B and V are positively correlated, B when V .

The cross price elasticity of demand for a good is the percentage change in the quantity demanded in response to a given percentage change in

Sometimes distinct patterns around a trend line can be caused by

What is the meaning of the statement "correlation does not mean causation"?

When a variable is determined by a factor inside of the function or model being evaluated, it is said to be

If two variables B and V are negatively correlated, B when V .

An estimated demand curve does NOT necessarily match actual data perfectly because

If the demand curve for slices of pizza is given as Q = 300 - 16p, then the point elasticity of demand when price is $1.50 is

Introduction

Supply and Demand

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 3: Empirical Methods for Demand Analysis

If a consumer increases her quantity of ice cream consumed by 100% when her income rises by 25%, then her income elasticity of demand for ice cream is

If the demand curve is given by Q = a + bp, then b is

When a variable is determined by a factor outside of the function or model being evaluated, it is said to be

A regression analysis with ________ explanatory variables is called a ________.

In Ordinary Least Squares Regression, the gap between the value of the dependent variable and the predicted value is called

The elasticity of demand is

A regression specification must include

If an estimated regression explains none of the variation, R2 will be

If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, using the formula for arc price elasticity what is the percentage change in quantity?

Ordinary Least Squares Regression analysis attempts to

If we have a small standard error, then

If demand is elastic

If two variables B and V are positively correlated, B ________ when V ________.

The cross price elasticity of demand for a good is the percentage change in the quantity demanded in response to a given percentage change in

Sometimes distinct patterns around a trend line can be caused by

What is the meaning of the statement "correlation does not mean causation"?

When a variable is determined by a factor inside of the function or model being evaluated, it is said to be

If two variables B and V are negatively correlated, B ________ when V ________.

An estimated demand curve does NOT necessarily match actual data perfectly because

If the demand curve for slices of pizza is given as Q = 300 - 16p, then the point elasticity of demand when price is $1.50 is

Introduction

Supply and Demand

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

A regression analysis with explanatory variables is called a .

If two variables B and V are positively correlated, B when V .

If two variables B and V are negatively correlated, B when V .