Exam 7: Demand Estimation and Forecasting

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 coefficient on P

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.) -Calculate the following elasticities: (1) Price elasticity: = __________. (2) Cross-price elasticity: = __________. (3) Income elasticity: = __________.

refer to the following: The following linear demand specification is estimated for Conlan Enterprises, a price-setting firm: ‪ where Q is the quantity demanded of the product Conlan Enterprises sells, P is the price of that product, M is income, and P_R is the price of a related product. The results of the estimation are presented below: -At the 1% level of significance, which estimates are statistically significant?

The estimated market demand for good X is where is the estimated number of units of good X demanded, P is the price of the good, M is income, and is the price of related good G. (All parameter estimates are statistically significant at the 1 percent level of significance.) -At P = $12, M = $30,000, and p_G = $50, the predicted quantity demanded is _________ units of good X.

The estimated market demand for good X is where is the estimated number of units of good X demanded, P is the price of the good, M is income, and is the price of related good G. (All parameter estimates are statistically significant at the 1 percent level of significance.) -At the values in part b, calculate estimates of the following elasticities: (1) Price elasticity: ‪ = _________. (2) Cross-price elasticity:‪ = __________. (3) Income elasticity:‪ = __________.

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: ‪ -If Border Snacks Inc. sets the price of picante at $6 per jar, the price of its nacho chips at $3 per bag, and the price of its queso dip at $8 per jar, sales of picante sauce is forecast to be ________________ jars per month. Show your work below:

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 2^nd quarter of 2008 are ___________ units.

refer to the following: The following linear demand specification is estimated for Conlan Enterprises, a price-setting firm: ‪ where Q is the quantity demanded of the product Conlan Enterprises sells, P is the price of that product, M is income, and P_R is the price of a related product. The results of the estimation are presented below: -At the 1% level of significance, the critical value of the F-statistic is equal to __________.

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: -In the year 2009, sales are forecasted to be ___________ units.

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. -At the 2 percent level of statistical significance, is there a statistically significant trend in the price of dolls?

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. -At the 2 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. The parameter estimate of C₁ ________ (is, is not) statistically significant. The parameter estimate of C₂ ________ (is, is not) statistically significant. The parameter estimate of C₃ ________ (is, is not) statistically significant.

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. -What is the estimated intercept of the trend line in the 4th quarter?

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 coefficient on P

refer to the following: A forecaster used the regression equation and quarterly sales data for 1993I-2010IV (t = 1, ..., 64) for an appliance manufacturer to obtain the results shown below. Q is quarterly sales, and D₁, D₂and D₃are dummy variables for quarters I, II, and III. -Using the estimation results given above, the predicted level of sales in 2011I is _______ units.

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: ‪ -A 22 percent decrease in household income, holding all other things constant, will cause quantity demanded to _____________ (increase, decrease) by _____ percent.

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: ‪ -The estimated demand equation can be expressed in logarithms as ln = ___________.

refer to the following: A forecaster used the regression equation and quarterly sales data for 1993I-2010IV (t = 1, ..., 64) for an appliance manufacturer to obtain the results shown below. Q is quarterly sales, and D₁, D₂and D₃are dummy variables for quarters I, II, and III. -What is the estimated intercept of the trend line in the second quarter?

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 third quarter?

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: ‪ -Using the estimated trend line, what is the predicted level of sales in 2010IV ?

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: -At the 1 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. The parameter estimate of c ________ (is, is not) statistically significant.