Question 1

The statistical analysis of economic phenomenon is defined as:

Accepted Answer

A) standard error. 
B) confidence intervals. 
C) the t-statistic. 
D) econometrics. 
A) standard error. 
B) confidence intervals. 
C) the t-statistic. 
D) econometrics.

Question 2

The demand for good X is estimated to be Qxd = 10, 000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income and AX is the amount of advertising on X.Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units.Based on this information, the cross price elasticity between goods X and Y is

Accepted Answer

A) 0.008. 
B) -0.08. 
C) -0.8. 
D) -8. 
A) 0.008. 
B) -0.08. 
C) -0.8. 
D) -8.

Question 3

An econometrician has estimated the inverse demand relation

Accepted Answer

@#IMG-DLM& and found that @#IMG-DLM& , @#IMG-DLM& , @#IMG-DLM& , and @#IMG-DLM& .Find the

Question 4

The demand for video recorders has been estimated to linear and given by the demand relation Qv = 145 - 3.2Pv + 7M - 0.95Pf - 39Pm, where Qv is the quantity of video recorders, Pf denotes the price of video recorder film, Pm is the price of attending a movie, Pv is the price of video recorders, and M is income.Based on the estimated demand equation we can conclude:

Accepted Answer

A) video recorders are normal goods. 
B) the demand for video recorders is inelastic. 
C) video recorders are normal goods and the demand for video recorders is inelastic. 
D) video recorders are normal goods and video recorder film is a complement for video recorders. 
A) video recorders are normal goods. 
B) the demand for video recorders is inelastic. 
C) video recorders are normal goods and the demand for video recorders is inelastic. 
D) video recorders are normal goods and video recorder film is a complement for video recorders.

Question 5

As we move down along a linear demand curve, the price elasticity of demand becomes more

Accepted Answer

A) Elastic 
B) Inelastic 
C) Log-linear 
D) Variable 
A) Elastic 
B) Inelastic 
C) Log-linear 
D) Variable

Question 6

Which of the following goods would you expect to have the most inelastic demand? Why?
a.Swiss cheese.
b.Chesse.
c.Dairy products.

Accepted Answer

Dairy products are expected to have the

Question 7

A firm is considering raising its price by 9 percent and has hired an econometrician to estimate the elasticity of demand for its product.The econometrician estimates the parameters of a log-liner demand function and reports that the parameter estimate for the elasticity of demand is -1.5 and the standard error of the estimate is 0.3.
a.If the firm raises its price by 9 percent, what is the expected change in quantity demanded?
b.Approximate the upper and lower bounds on the 95 percent confidence interval for the change in quantity demanded.

Accepted Answer

a.Using the estimated own price elastici

Question 8

Suppose the own-price elasticity of demand for good X is -0.25, and that the quantity of good X increases by 5%.What would you expect to happen to the total expenditures on good X?

Accepted Answer

A) increase. 
B) decrease. 
C) unchanged. 
D) neither increase, decrease nor remain unchanged. 
A) increase. 
B) decrease. 
C) unchanged. 
D) neither increase, decrease nor remain unchanged.

Question 9

A study sponsored by the American Medical Association suggests that the absolute value of the own price elasticity for surgical procedures is smaller than that for the own price elasticity for office visits.Explain why this would be expected.

Accepted Answer

The demand for surgical procedures is ge

Question 10

Use the regression output to compute the R Square and Adjusted R Square (points A and B, respectively).

Accepted Answer

A) 0.056 and 0.017. 
B) 0.944 and 0.942. 
C) 0.944 and -0.428. 
D) 0.06 and 0.02. 
A) 0.056 and 0.017. 
B) 0.944 and 0.942. 
C) 0.944 and -0.428. 
D) 0.06 and 0.02.

Question 11

For a given set of data and regression equation, the greater the R-square

Accepted Answer

A) the greater the t-value. 
B) the lower the t-value. 
C) the greater adjusted R-square. 
D) the greater the F-statistic. 
A) the greater the t-value. 
B) the lower the t-value. 
C) the greater adjusted R-square. 
D) the greater the F-statistic.

Question 12

If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100, what is the absolute value of the own-price elasticity at a price of $7?

Accepted Answer

A) 0.57. 
B) 1.75. 
C) 0.02. 
D) 1.24. 
A) 0.57. 
B) 1.75. 
C) 0.02. 
D) 1.24.

Question 13

The short run response of quantity demanded to a change in price is usually:

Accepted Answer

A) The same as the long run response. 
B) Less than the long run response. 
C) Greater than the long run response. 
D) None of the statements associated with this question are correct. 
A) The same as the long run response. 
B) Less than the long run response. 
C) Greater than the long run response. 
D) None of the statements associated with this question are correct.

Question 14

Suppose the demand for good x is lnQxd = 21 - 0.8 lnPx - 1.6 lnPy + 6.2 lnM + 0.4 lnAx.Then we know that the own-price elasticity for good x is:

Accepted Answer

A) unitary. 
B) elastic. 
C) inelastic. 
D) cannot be calculated from the existing information. 
A) unitary. 
B) elastic. 
C) inelastic. 
D) cannot be calculated from the existing information.

Question 15

The demand function in the above table is QXd = 100 - 2PX.Based on this information, compute the own price elasticity of demand when PX = $25 (point C).

Accepted Answer

A) -1.09. 
B) -1. 
C) -0.50. 
D) -0.25. 
A) -1.09. 
B) -1. 
C) -0.50. 
D) -0.25.

Question 16

Your firm's research department has estimated the elasticity of demand for toys to be -0.7.As the manager of a local chain of toy stores, determine the impact of an 8 percent increase in toy prices on your total revenues.

Accepted Answer

Since the elasticity of demand

Question 17

If the short-term own price elasticity for transportation is estimated to be -0.6, then long-term own price elasticity is expected to be

Accepted Answer

A) -0.6. 
B) greater than -0.6. 
C) less than -0.6. 
D) neither greater than, less than nor equal to -0.6. 
A) -0.6. 
B) greater than -0.6. 
C) less than -0.6. 
D) neither greater than, less than nor equal to -0.6.

Question 18

The manager can be 95% confident that the true value of the underlying parameters in a regression is not zero if the absolute value of t-statistic is

Accepted Answer

A) less than 1. 
B) less than 2. 
C) greater than 1. 
D) greater than 2. 
A) less than 1. 
B) less than 2. 
C) greater than 1. 
D) greater than 2.

Question 19

Suppose the equilibrium price in the market is $60 and the marginal revenue associated with the linear (inverse) demand function is $20.Then we know that the own price elasticity of demand is

Accepted Answer

A) -2. 
B) 2. 
C) -0.50. 
D) cannot be determined from the information contained in the question. 
A) -2. 
B) 2. 
C) -0.50. 
D) cannot be determined from the information contained in the question.

Question 20

As the manager of a local hotel chain, you have hired an econometrician to estimate the demand for one of your hotels (H).The estimation has resulted in the following demand function:

Accepted Answer

@#IMG-DLM& , where @#IMG-DLM& is the price of a room at your

The statistical analysis of economic phenomenon is defined as:

An econometrician has estimated the inverse demand relation

As we move down along a linear demand curve, the price elasticity of demand becomes more

Which of the following goods would you expect to have the most inelastic demand? Why? a.Swiss cheese. b.Chesse. c.Dairy products.

Suppose the own-price elasticity of demand for good X is -0.25, and that the quantity of good X increases by 5%.What would you expect to happen to the total expenditures on good X?

A study sponsored by the American Medical Association suggests that the absolute value of the own price elasticity for surgical procedures is smaller than that for the own price elasticity for office visits.Explain why this would be expected.

Use the regression output to compute the R Square and Adjusted R Square (points A and B, respectively).

For a given set of data and regression equation, the greater the R-square

If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100, what is the absolute value of the own-price elasticity at a price of $7?

The short run response of quantity demanded to a change in price is usually:

Suppose the demand for good x is lnQ_x^d = 21 - 0.8 lnP_x - 1.6 lnP_y + 6.2 lnM + 0.4 lnA_x.Then we know that the own-price elasticity for good x is:

The demand function in the above table is Q_X^d = 100 - 2P_X.Based on this information, compute the own price elasticity of demand when P_X = $25 (point C).

Your firm's research department has estimated the elasticity of demand for toys to be -0.7.As the manager of a local chain of toy stores, determine the impact of an 8 percent increase in toy prices on your total revenues.

If the short-term own price elasticity for transportation is estimated to be -0.6, then long-term own price elasticity is expected to be

The manager can be 95% confident that the true value of the underlying parameters in a regression is not zero if the absolute value of t-statistic is

Suppose the equilibrium price in the market is $60 and the marginal revenue associated with the linear (inverse) demand function is $20.Then we know that the own price elasticity of demand is

As the manager of a local hotel chain, you have hired an econometrician to estimate the demand for one of your hotels (H).The estimation has resulted in the following demand function:

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

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Exam 3: Quantitative Demand Analysis

The statistical analysis of economic phenomenon is defined as:

An econometrician has estimated the inverse demand relation

As we move down along a linear demand curve, the price elasticity of demand becomes more

Which of the following goods would you expect to have the most inelastic demand? Why? a.Swiss cheese. b.Chesse. c.Dairy products.

Suppose the own-price elasticity of demand for good X is -0.25, and that the quantity of good X increases by 5%.What would you expect to happen to the total expenditures on good X?

A study sponsored by the American Medical Association suggests that the absolute value of the own price elasticity for surgical procedures is smaller than that for the own price elasticity for office visits.Explain why this would be expected.

Use the regression output to compute the R Square and Adjusted R Square (points A and B, respectively).

For a given set of data and regression equation, the greater the R-square

If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100, what is the absolute value of the own-price elasticity at a price of $7?

The short run response of quantity demanded to a change in price is usually:

Suppose the demand for good x is lnQxd = 21 - 0.8 lnPx - 1.6 lnPy + 6.2 lnM + 0.4 lnAx.Then we know that the own-price elasticity for good x is:

The demand function in the above table is QXd = 100 - 2PX.Based on this information, compute the own price elasticity of demand when PX = $25 (point C).

Your firm's research department has estimated the elasticity of demand for toys to be -0.7.As the manager of a local chain of toy stores, determine the impact of an 8 percent increase in toy prices on your total revenues.

If the short-term own price elasticity for transportation is estimated to be -0.6, then long-term own price elasticity is expected to be

The manager can be 95% confident that the true value of the underlying parameters in a regression is not zero if the absolute value of t-statistic is

Suppose the equilibrium price in the market is $60 and the marginal revenue associated with the linear (inverse) demand function is $20.Then we know that the own price elasticity of demand is

As the manager of a local hotel chain, you have hired an econometrician to estimate the demand for one of your hotels (H).The estimation has resulted in the following demand function:

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Suppose the demand for good x is lnQ_x^d = 21 - 0.8 lnP_x - 1.6 lnP_y + 6.2 lnM + 0.4 lnA_x.Then we know that the own-price elasticity for good x is:

The demand function in the above table is Q_X^d = 100 - 2P_X.Based on this information, compute the own price elasticity of demand when P_X = $25 (point C).