Exam 7: Demand Estimation and Forecasting

assume that the income is $10,000, the price of the related good is $40, and Conlan chooses to set the price of this product at $30. -At the prices and income given above, what is the income elasticity?

A linear trend equation for sales of the form was estimated using annual sales data for the period 2000 - 2007 (i.e., t = 2000, 2001, ..., 2007). The results of the regression are as follows: -The statistical estimates indicate a(n) ___________ (upward, downward) trend in sales of _________ units per year.

The empirical demand function is estimated in log-linear form as where is the estimated number of units of good X demanded, P is the price of X, M is income, and is the price of related good Y. (All parameters estimates are significantly different from zero at the 5 percent level.) -Express the empirical demand function in the alternative (non-logarithmic) form: =_________________________.

The following log-linear demand curve for a price-setting firm is estimated using the ordinary least-squares method: The estimation results are presented below: ‪ -Good X is a(n) ______________ good and goods X and R are _________________.

The following log-linear demand curve for a price-setting firm is estimated using the ordinary least-squares method: The estimation results are presented below: ‪ -Find estimates for the following elasticities: (1) Price elasticity: __________. (2) Cross-price elasticity: __________. (3) Income elasticity: __________.

A linear trend equation for sales of the form was estimated using annual sales data for the period 2000 - 2007 (i.e., t = 2000, 2001, ..., 2007). The results of the regression are as follows: -At the 10 percent level of significance, the critical value of the t-statistic is _______. The parameter estimate of a ________ (is, is not) statistically significant. The parameter estimate of b ________ (is, is not) statistically significant.

Border Snacks Inc. produces and sells picante sauce, nacho chips, and queso dip. The company's marketing department estimated a linear demand function for Border's picante sauce: where is the number of jars of picante sauce sold per month, is the price of picante sauce, is the price of a bag of nacho chips, is the price of a jar of queso dip, and M is consumer income. In the market served by Border Snacks, income is currently $16,000. The following regression results were obtained using 22 monthly observations: ‪ -The estimates indicate that picante sauce and nacho chips are _______. The estimates indicate that picante sauce and queso dip are _________. The estimates indicate that picante sauce is a(n) _________ good.

refer to the following: The manufacturer of Beanie Baby dolls used quarterly price data for 2002I - 2010IV (t = 1, ..., 36) and the regression equation to forecast doll prices in the year 2011. P_t is the quarterly price of dolls, and D1_t , D2_t and D3_t are dummy variables for quarters I, II, and III, respectively. -The estimated QUARTERLY increase in price is ______, and the estimated ANNUAL increase in price is ______ .

refer to the following: The estimated demand for a good is where Q is the quantity demanded of the good, P is the price of the good, M is income, and is the price of related good R. -The good is

The empirical demand function is estimated in log-linear form as where is the estimated number of units of good X demanded, P is the price of X, M is income, and is the price of related good Y. (All parameters estimates are significantly different from zero at the 5 percent level.) -Good X is a(n) ______________ good and goods X and Y are ____________________.

refer to the following: The estimated demand for a good is where Q is the quantity demanded of the good, P is the price of the good, M is income, and is the price of related good R. -This good and the related good R are

refer to the following: Build-Right Concrete Products produces specialty cement used in construction of highways. Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: where Q = yards of cement demanded monthly, P = the price of Build-Right's cement per yard, M = state tax revenues per capita, and = the price of asphalt per yard. The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation. The estimation results are presented below: ‪ -The estimated demand for cement is

You decide to estimate the following quarterly sales forecasting model for new boat sales in your local county: The equation is estimated using quarterly data on new boat sales in the county from 2001III -2007IV ( t = 1,..., 26). The variable D is a dummy variable for the second quarter, which is the "season" for selling new boats: D = 1 in the second quarter, and 0 otherwise. The results of the estimation are: -The forecasted sales for the 3^rd quarter of 2008 are ___________ units.

refer to the following: The estimated demand for a good is where Q is the quantity demanded of the good, P is the price of the good, M is income, and is the price of related good R. -This good and good R are

assume that the income is $10,000, the price of the related good is $40, and Conlan chooses to set the price of this product at $30. -At the prices and income given above, what is the price elasticity of demand?

You decide to estimate the following quarterly sales forecasting model for new boat sales in your local county: The equation is estimated using quarterly data on new boat sales in the county from 2001III -2007IV ( t = 1,..., 26). The variable D is a dummy variable for the second quarter, which is the "season" for selling new boats: D = 1 in the second quarter, and 0 otherwise. The results of the estimation are: -The forecasted sales for the 1^st quarter of 2008 are ___________ units.

refer to the following: A consulting firm estimates the following quarterly sales forecasting model: ‪ The equation is estimated using quarterly data from 2000I-2010III (t = 1,..., 43). The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter, and 0 otherwise. The results of the estimation are: ‪ -What is the estimated intercept of the trend line in the second quarter?

A forecaster used the following regression equation and quarterly sales data during 1999II - 2007IV (t = 1, ..., 35) for an appliance manufacturer to obtain the estimation results shown below. Q is quarterly sales, and ,and are seasonal dummy variables for quarters I, II, and III. -The estimated intercepts for each of the four quarters are: Intercept for quarter 1 is __________. Intercept for quarter 2 is __________. Intercept for quarter 3 is __________. Intercept for quarter 4 is __________.

If demand is estimated using the empirical specification , then an equivalent expression for demand is

A forecaster used the following regression equation and quarterly sales data during 1999II - 2007IV (t = 1, ..., 35) for an appliance manufacturer to obtain the estimation results shown below. Q is quarterly sales, and ,and are seasonal dummy variables for quarters I, II, and III. -The statistical estimates indicate a(n) ___________ (upward, downward) trend in sales of _________ units per quarter year.