Question 1

$$\ln Q _ { t } = a + b \ln P _ { t } + c \ln G D P _ { t }$$
One of the advantages of using the following function in estimation is

Accepted Answer

A)  problems with multicollinearity will be eliminated. 
B)  problems with heteroscedasticity will be eliminated. 
C)  the estimated slope coefficients are all elasticities. 
D)  None of the above is correct. 
A)  problems with multicollinearity will be eliminated. 
B)  problems with heteroscedasticity will be eliminated. 
C)  the estimated slope coefficients are all elasticities. 
D)  None of the above is correct.

Question 2

Multicollinearity refers to a situation in which two or more of the independent variables in a regression model are highly correlated.

Accepted Answer

A) True 
 B)False

Question 3

After estimating the regression using 10 observations, you obtained the following results:
 $$\begin{array} { l } 
Q = 50 - 0.5 P + 0.6 I \
\text { (15) } ( 0.12 ) \quad ( 0.3 ) \
\end{array}$$ Compute the t-statistics for your estimates for price (P) and income (i). Can we reject the null hypothesis at the 5% significance level?

Accepted Answer

The answer of After estimating the regression using 10 observations,...

Question 4

For a given sample size, the more independent variables are incorporated in a regression model, the more degrees of freedom the relevant t distribution has.

Accepted Answer

A) True 
 B)False

Question 5

Your coworker has computed the unexplained and the total variation in Y and asked you to compute the coefficient of determination Unexpl.var.in $Y = \sum _ { t = 1 } ^ { n } \left( \hat { Y } _ { t } - \bar { Y } \right) ^ { 2 } = 380$ Total.var. in $Y = \sum _ { t = 1 } ^ { n } \left( Y _ { t } - \bar { Y } \right) ^ { 2 } = 990$

Accepted Answer

The answer of Your coworker has computed the unexplained and...

Question 6

accounts for the degrees of freedom while adjusted does not.

Accepted Answer

A) True 
 B)False

Question 7

The F statistic calculated from a multiple regression analysis is equal to 5.96. If the critical values of the F distribution are 2.42 and 3.47 at the 5 percent and 1 percent levels of significance, respectively, then

Accepted Answer

A)  at least one of the slope coefficients is significantly different from zero. 
B)  none of the slope coefficients is significantly different from zero. 
C)  all of the slope coefficients are significantly different from zero. 
D)  no more than 5 percent (1 out of 20) of the slope coefficients are different from zero. 
A)  at least one of the slope coefficients is significantly different from zero. 
B)  none of the slope coefficients is significantly different from zero. 
C)  all of the slope coefficients are significantly different from zero. 
D)  no more than 5 percent (1 out of 20) of the slope coefficients are different from zero.

Question 8

Using consumer clinics approach, data is obtained from

Accepted Answer

A)  questioning a sample of consumers. 
B)  laboratory experiments. 
C)  observing consumers purchasing and consuming products. 
D)  real market tests in actual marketplace. 
A)  questioning a sample of consumers. 
B)  laboratory experiments. 
C)  observing consumers purchasing and consuming products. 
D)  real market tests in actual marketplace.

Question 9

A scatter diagram is a graph of a linear function.

Accepted Answer

A) True 
 B)False

Question 10

You have found the b estimate to be $\hat { b } = 1.25$ with standard error $s _ { \hat { b } } = 0.5$ . Assuming you had a large sample, compute the confidence interval for the 5% significance level.

Accepted Answer

The answer of You have found the b estimate to...

Question 11

The estimation of consumer demand by questioning a sample of consumers is referred to as the

Accepted Answer

A)  consumer survey approach. 
B)  observational research approach. 
C)  consumer clinic approach. 
D)  market experiment approach. 
A)  consumer survey approach. 
B)  observational research approach. 
C)  consumer clinic approach. 
D)  market experiment approach.

Question 12

The application of multiple regression analysis to a time-series data set yields a calculated Durbin-Watson statistic that is equal to 1.49. If the lower test value at the 1 percent level is 1.28 and the upper value is 1.51, then

Accepted Answer

A)  there is no evidence of a problem. 
B)  there is some evidence of a problem, but it is not significant. 
C)  there is evidence of a significant problem. 
D)  there is not sufficient information given to determine whether or not there is a problem. 
A)  there is no evidence of a problem. 
B)  there is some evidence of a problem, but it is not significant. 
C)  there is evidence of a significant problem. 
D)  there is not sufficient information given to determine whether or not there is a problem.

Question 13

The scatter diagram represents a data set and a plot of the simple linear regression equation estimated from the data. The diagram shows evidence of

Accepted Answer

A)  homoscedasticity. 
B)  heteroscedasticity. 
C)  positive autocorrelation. 
D)  negative autocorrelation. 
A)  homoscedasticity. 
B)  heteroscedasticity. 
C)  positive autocorrelation. 
D)  negative autocorrelation.

Question 14

Fill in the remaining information and compute the estimated value of b.
 $$X _ { t } - \bar { X } \quad Y _ { t } - \bar { Y } \quad \left( X _ { t } - \bar { X } \right) \left( X _ { t } - \bar { X } \right) \quad \left( X _ { t } - \bar { X } \right) ^ { 2 }$$ 
 
$\begin{array} { l l l } (t)&(X)&(Y)\1 & 10 & 35 \ 2 & 15 & 45 \ 3 & 12 & 40 \ 4 & 20 & 50 \end{array}$

Accepted Answer

The answer of Fill in the remaining information and compute...

Question 15

If the absolute value of the t ratio is larger than the t value taken from the table, then the conclusion is that the slope does not differ from zero.

Accepted Answer

A) True 
 B)False

Question 16

A market experiment is carried out by providing consumers with a sum of money that must be spent in a simulated store.

Accepted Answer

A) True 
 B)False

Question 17

The significance level of a t test on the slope of a simple linear regression equation measures the probability of drawing an incorrect conclusion when the test indicates that X and Y have a significant relationship.

Accepted Answer

A) True 
 B)False

Question 18

A simple linear regression analysis based on a data set that consists of 20 observations yielded the following estimated equation:
Q = 120 - 3.6P
If the coefficient of determination is 0.81, then the correlation coefficient is equal to

Accepted Answer

A)  0.81. 
B)  -0.81. 
C)  -0.90. 
D)  0.90. 
A)  0.81. 
B)  -0.81. 
C)  -0.90. 
D)  0.90.

Question 19

The log-linear demand function for Beckler's Frozen Pizzas is:
lnQX = 4 - 3.80 lnPX + 0.30 lnPY + 0.15 lnS + lnA + 1.50 lnI
The number of pizzas sold per week (QX) depends on the price charged for a pizza (PX), the price charged for a competitor's brand of pizza (PY), the percentage of single-parent families (S), monthly advertising expenditures (A) in thousands, and average annual household income (i)in thousands.
 (i) If $P _ { X } = \$ 4.00 , P _ { Y } = \$ 3.50 , S = 40 \% , A = \$ 5,000$, and $I = \$ 40,000$, how many pizzas can B eckler's expect to sell in a week? (ii)Interpret the price elasticity, cross-price elasticity, family structure elasticity, advertising elasticity, and income elasticity of demand for pizzas.
(iii)The president of Beckler's plans to increase the price of their pizzas by 25 percent and to increase advertising expenditures by 10 percent. By what percentage can the number of pizzas sold by Beckler's be expected to change? Will total revenue increase, decrease, or remain the same? Explain your answer.
(iv)
If Beckler's lowers the price of its pizzas by 5 percent and increases advertising expenditures by 10 percent while Beckler's competitor lowers the price of its pizza by 20 percent, what effect will this have on the number of Beckler's pizzas sold per week?

Accepted Answer

Question 20

The identification problem refers to the difficulties that a researcher encounters when trying to

Accepted Answer

A)  determine which independent variables influence quantity demanded. 
B)  find accurate data on the price of a commodity and on the quantity demanded of a commodity. 
C)  estimate a demand function from data on commodity price and quantity demanded. 
D)  measure the impact of extraneous variables on experimental market data. 
A)  determine which independent variables influence quantity demanded. 
B)  find accurate data on the price of a commodity and on the quantity demanded of a commodity. 
C)  estimate a demand function from data on commodity price and quantity demanded. 
D)  measure the impact of extraneous variables on experimental market data.

$\ln Q _ { t } = a + b \ln P _ { t } + c \ln G D P _ { t }$ One of the advantages of using the following function in estimation is

Multicollinearity refers to a situation in which two or more of the independent variables in a regression model are highly correlated.

After estimating the regression using 10 observations, you obtained the following results: Q=50-0.5P+0.6I (15) (0.12)(0.3) Compute the t-statistics for your estimates for price (P) and income (i). Can we reject the null hypothesis at the 5% significance level?

For a given sample size, the more independent variables are incorporated in a regression model, the more degrees of freedom the relevant t distribution has.

accounts for the degrees of freedom while adjusted does not.

The F statistic calculated from a multiple regression analysis is equal to 5.96. If the critical values of the F distribution are 2.42 and 3.47 at the 5 percent and 1 percent levels of significance, respectively, then

Using consumer clinics approach, data is obtained from

A scatter diagram is a graph of a linear function.

You have found the b estimate to be $\hat { b } = 1.25$ with standard error $s _ { \hat { b } } = 0.5$ . Assuming you had a large sample, compute the confidence interval for the 5% significance level.

The estimation of consumer demand by questioning a sample of consumers is referred to as the

The application of multiple regression analysis to a time-series data set yields a calculated Durbin-Watson statistic that is equal to 1.49. If the lower test value at the 1 percent level is 1.28 and the upper value is 1.51, then

The scatter diagram represents a data set and a plot of the simple linear regression equation estimated from the data. The diagram shows evidence of

If the absolute value of the t ratio is larger than the t value taken from the table, then the conclusion is that the slope does not differ from zero.

A market experiment is carried out by providing consumers with a sum of money that must be spent in a simulated store.

The significance level of a t test on the slope of a simple linear regression equation measures the probability of drawing an incorrect conclusion when the test indicates that X and Y have a significant relationship.

A simple linear regression analysis based on a data set that consists of 20 observations yielded the following estimated equation: Q = 120 - 3.6P If the coefficient of determination is 0.81, then the correlation coefficient is equal to

The identification problem refers to the difficulties that a researcher encounters when trying to

The Nature and Scope of Managerial Economics

Demand, Supply, and Equilibrium Analysis

Optimization Techniques and New Management Tools

Demand Theory

Demand Forecasting

Production Theory and Estimation

Cost Theory and Estimation

Market Structure: Perfect Competition, Monopoly, and Monopolistic Competition

Oligopoly and Firm Architecture

Game Theory and Strategic Behavior

Pricing Practices

Regulation and Antitrust: The Role of Government in the Economy

Risk Analysis

Long-Run Investment Decisions: Capital Budgeting

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Exam 5: Demand Estimation

ln⁡Qt=a+bln⁡Pt+cln⁡GDPt\ln Q _ { t } = a + b \ln P _ { t } + c \ln G D P _ { t }lnQt​=a+blnPt​+clnGDPt​ One of the advantages of using the following function in estimation is

Multicollinearity refers to a situation in which two or more of the independent variables in a regression model are highly correlated.

After estimating the regression using 10 observations, you obtained the following results: Q=50-0.5P+0.6I (15) (0.12)(0.3) Compute the t-statistics for your estimates for price (P) and income (i). Can we reject the null hypothesis at the 5% significance level?

For a given sample size, the more independent variables are incorporated in a regression model, the more degrees of freedom the relevant t distribution has.

accounts for the degrees of freedom while adjusted does not.

The F statistic calculated from a multiple regression analysis is equal to 5.96. If the critical values of the F distribution are 2.42 and 3.47 at the 5 percent and 1 percent levels of significance, respectively, then

Using consumer clinics approach, data is obtained from

A scatter diagram is a graph of a linear function.

You have found the b estimate to be b^=1.25\hat { b } = 1.25b^=1.25 with standard error sb^=0.5s _ { \hat { b } } = 0.5sb^​=0.5 . Assuming you had a large sample, compute the confidence interval for the 5% significance level.

The estimation of consumer demand by questioning a sample of consumers is referred to as the

The application of multiple regression analysis to a time-series data set yields a calculated Durbin-Watson statistic that is equal to 1.49. If the lower test value at the 1 percent level is 1.28 and the upper value is 1.51, then

The scatter diagram represents a data set and a plot of the simple linear regression equation estimated from the data. The diagram shows evidence of

If the absolute value of the t ratio is larger than the t value taken from the table, then the conclusion is that the slope does not differ from zero.

A market experiment is carried out by providing consumers with a sum of money that must be spent in a simulated store.

The significance level of a t test on the slope of a simple linear regression equation measures the probability of drawing an incorrect conclusion when the test indicates that X and Y have a significant relationship.

A simple linear regression analysis based on a data set that consists of 20 observations yielded the following estimated equation: Q = 120 - 3.6P If the coefficient of determination is 0.81, then the correlation coefficient is equal to

The identification problem refers to the difficulties that a researcher encounters when trying to

The Nature and Scope of Managerial Economics

Demand, Supply, and Equilibrium Analysis

Optimization Techniques and New Management Tools

Demand Theory

Demand Forecasting

Production Theory and Estimation

Cost Theory and Estimation

Market Structure: Perfect Competition, Monopoly, and Monopolistic Competition

Oligopoly and Firm Architecture

Game Theory and Strategic Behavior

Pricing Practices

Regulation and Antitrust: The Role of Government in the Economy

Risk Analysis

Long-Run Investment Decisions: Capital Budgeting

Filters

$\ln Q _ { t } = a + b \ln P _ { t } + c \ln G D P _ { t }$ One of the advantages of using the following function in estimation is

You have found the b estimate to be $\hat { b } = 1.25$ with standard error $s _ { \hat { b } } = 0.5$ . Assuming you had a large sample, compute the confidence interval for the 5% significance level.