Exam 3: Measuring and Using Demand

Using Excel, Big Poppa's estimates the weekly demand function for its BBQ sandwiches to be Q^d = 1,385.63 - (22.30 × P). In reference to the estimated slope coefficient for price b^, which of the following standard errors gives you the most confidence that the estimated slope coefficient is close to the true slope coefficient?

You are the owner of a construction company that specializes in new beach- front condominiums. If the income elasticity for your condominiums is 4.25, which of the following statements is true?

If a 10 percent increase in price leads to a 15 percent decrease in the quantity demanded of the good, as a result of the price change, the total revenue for this product will _ _________.

If a 2 percent increase in the price of a good leads to a 10 percent decrease in the quantity demanded, the price elasticity of demand for the good equals__________ .