Exam 3: Measuring and Using Demand

Using Excel, Big Poppa's estimates the weekly demand function for its BBQ sandwiches to be Q^d = 1,258.33 - (19.55 × P). In reference to the estimated slope coefficient for price , which of the following standard errors will provide the smallest 95 percent confidence interval for the slope coefficient?

The price elasticity for corn from a particular farmer is likely to be________ .

If Excel estimated the 95 percent confidence interval for a slope coefficient for the price to run from - 25.50 to - 22.30, which of the following is true?

If the cross- price elasticity between Goods X and Y is 2.0, the goods are and an increase in the price of Good X will cause a(n)_________in the quantity demanded of Good Y.

You are the owner of a boutique clothing store and estimate the price elasticity of demand for your clothing to be 2.50 and the income elasticity of demand for your clothing to be 1.55. If you increase the price of your clothing by 10 percent, which of the following should you expect to occur?

If a nonlinear regression equation provides a better fit to the actual data, but a straight- line regression is estimated, the estimated straight- line regression will have a greater R² than the R² from the nonlinear regression.

If a scatter plot of the data points for the price and quantity demanded appear to have a convex (bowed inward)shape, estimating a log- linear demand curve will likely yield a R² that is greater than the R² from a straight- line demand curve.

All of the following are true regarding the standard error of a coefficient except which one?

If Excel estimates the demand function for a product to be: Q^d = 1,500 - (5 × P)and the actual quantity demanded is 850 when a price of $125 is charged, the estimated residual is 25.

If the price elasticity of demand for your product is 0.75 and you increase the price of the product, you should expect an increase in total revenue.

For a linear demand curve, the point elasticity of demand will be greater at higher prices relative to lower prices.

Because there will always be some random factors the affect demand that cannot be captured, a is ________added to the regression equation.

Using Excel, the manager of Quick Breaks Coffees has estimated the daily demand function for its regular coffees; the results are shown in the table above. Which of the following statements is correct?

If a 5 percent increase in consumer incomes leads to a 10 percent increase in the quantity demanded for a good, the good is a(n)_________ good with an income elasticity of________ .

When reviewing reports based on a regression analysis, it is important to consider all of the following except which one?

A linear demand curve is a constant elasticity of demand curve.

If the R2 is large, you are confident in the regression results because the predicted values are ________ the actual values.

The scatter diagram above shows the actual data for the price and quantity demanded of a product. -Refer to the scatter diagram above. The scatter diagram suggests all of the following, except which one?

If the P- value for an estimated slope coefficient is 0.025, using 95 percent confidence, which of the following is true?

A nonlinear demand curves have positive slope.