Question 1

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 2

Demand curves and other economic relationships

Accepted Answer

A) are always linear. 
B) produce linear regression equations. 
C) can take many different functional forms. 
D) are dependent upon the type of advertising done. 
A) are always linear. 
B) produce linear regression equations. 
C) can take many different functional forms. 
D) are dependent upon the type of advertising done.

Question 3

The percentage change in the quantity demanded in response to a percentage change in the price is known as the

Accepted Answer

A) slope of the demand curve. 
B) excess demand. 
C) price elasticity of demand. 
D) All of the above. 
A) slope of the demand curve. 
B) excess demand. 
C) price elasticity of demand. 
D) All of the above.

Question 4

The random error term ________ the effects of ________ influences on the dependent variable that are not included as explanatory variables.

Accepted Answer

A) captures; observed 
B) ignores; unobserved 
C) ignores; observed 
D) captures; unobserved 
A) captures; observed 
B) ignores; unobserved 
C) ignores; observed 
D) captures; unobserved

Question 5

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) 0.25 
D) 0.08 
A) 8.0 
B) 4.0 
C) 0.25 
D) 0.08

Question 6

Two variables are said to be ________ if they move together.

Accepted Answer

A) procyclical 
B) spurious 
C) correlated 
D) co-dependent 
A) procyclical 
B) spurious 
C) correlated 
D) co-dependent

Question 7

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 8

Elasticity along a downward sloping linear demand curve

Accepted Answer

A) is constant and equal to the slope of the curve. 
B) is constant and equal to the slope times the ratio of price to quantity. 
C) changes along the curve. 
D) does not vary with price unless the good is expensive. 
A) is constant and equal to the slope of the curve. 
B) is constant and equal to the slope times the ratio of price to quantity. 
C) changes along the curve. 
D) does not vary with price unless the good is expensive.

Question 9

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 10

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 price?

Accepted Answer

A) 18.18% 
B) 29.89% 
C) 20% 
D) 16.67% 
A) 18.18% 
B) 29.89% 
C) 20% 
D) 16.67%

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

Ramen noodles are likely considered

Accepted Answer

A) a normal good. 
B) an inferior good. 
C) to have inelastic demand. 
D) to have perfectly elastic demand. 
A) a normal good. 
B) an inferior good. 
C) to have inelastic demand. 
D) to have perfectly elastic demand.

Question 13

-The above figure shows the demand curve for crude oil. The demand curve has unitary price elasticity when price equals

Accepted Answer

A) $0. 
B) $1. 
C) $10. 
D) $20. 
A) $0. 
B) $1. 
C) $10. 
D) $20.

Question 14

The gap between the actual and predicted values of a dependent variable is called

Accepted Answer

A) the error term. 
B) an exogenous factor. 
C) the residual. 
D) an endogenous factor. 
A) the error term. 
B) an exogenous factor. 
C) the residual. 
D) an endogenous factor.

Question 15

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 16

A 95% confidence interval

Accepted Answer

A) indicates that there is 95% confidence that the value of the estimated coefficient is correct. 
B) indicates that there is 95% confidence that the degrees of freedom explain the data correctly. 
C) is a range of of values that gives a 95% probability that the true value of the coefficient is within the specified interval. 
D) is the probability that we have obtained the true value of the coefficient with 95% accuracy. 
A) indicates that there is 95% confidence that the value of the estimated coefficient is correct. 
B) indicates that there is 95% confidence that the degrees of freedom explain the data correctly. 
C) is a range of of values that gives a 95% probability that the true value of the coefficient is within the specified interval. 
D) is the probability that we have obtained the true value of the coefficient with 95% accuracy.

Question 17

If the price of orange juice rises 10%, and as a result the quantity demanded falls by 8%, the price elasticity of demand for orange juice is

Accepted Answer

A) -1.25. 
B) inelastic. 
C) Both A and B above. 
D) Neither A nor B above. 
A) -1.25. 
B) inelastic. 
C) Both A and B above. 
D) Neither A nor B above.

Question 18

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 19

A regression specification must include

Accepted Answer

A) the functional relationship between dependent and explanatory variables. 
B) the estimated coefficients. 
C) the estimated t-statistic. 
D) All of the above. 
A) the functional relationship between dependent and explanatory variables. 
B) the estimated coefficients. 
C) the estimated t-statistic. 
D) All of the above.

Question 20

If the demand for orange juice is expressed as Q = 2000 - 500p, where Q is measured in gallons and p is measured in dollars, then at the price of $3, the demand curve

Accepted Answer

A) is elastic. 
B) has a unitary elasticity. 
C) is inelastic. 
D) is perfectly inelastic. 
A) is elastic. 
B) has a unitary elasticity. 
C) is inelastic. 
D) is perfectly inelastic.

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

Demand curves and other economic relationships

The percentage change in the quantity demanded in response to a percentage change in the price is known as the

The random error term the effects of influences on the dependent variable that are not included as explanatory variables.

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

Two variables are said to be ________ if they move together.

Sometimes distinct patterns around a trend line can be caused by

Elasticity along a downward sloping linear demand curve

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

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 price?

If we have a small standard error, then

Ramen noodles are likely considered

-The above figure shows the demand curve for crude oil. The demand curve has unitary price elasticity when price equals

The gap between the actual and predicted values of a dependent variable is called

Ordinary Least Squares Regression analysis attempts to

A 95% confidence interval

If the price of orange juice rises 10%, and as a result the quantity demanded falls by 8%, the price elasticity of demand for orange juice is

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

A regression specification must include

If the demand for orange juice is expressed as Q = 2000 - 500p, where Q is measured in gallons and p is measured in dollars, then at the price of $3, the demand curve

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

Demand curves and other economic relationships

The percentage change in the quantity demanded in response to a percentage change in the price is known as the

The random error term ________ the effects of ________ influences on the dependent variable that are not included as explanatory variables.

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

Two variables are said to be ________ if they move together.

Sometimes distinct patterns around a trend line can be caused by

Elasticity along a downward sloping linear demand curve

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

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 price?

If we have a small standard error, then

Ramen noodles are likely considered

-The above figure shows the demand curve for crude oil. The demand curve has unitary price elasticity when price equals

The gap between the actual and predicted values of a dependent variable is called

Ordinary Least Squares Regression analysis attempts to

A 95% confidence interval

If the price of orange juice rises 10%, and as a result the quantity demanded falls by 8%, the price elasticity of demand for orange juice is

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

A regression specification must include

If the demand for orange juice is expressed as Q = 2000 - 500p, where Q is measured in gallons and p is measured in dollars, then at the price of $3, the demand curve

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

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

The random error term the effects of influences on the dependent variable that are not included as explanatory variables.

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