Question 1

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 2

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 3

The t-statistic measures

Accepted Answer

A)  the efficiency of the t-test relative to the standard z-test. 
B)  the probability that the estimated coefficient is within the range of the standard error. 
C)  whether the estimated coefficient is independent of the standard error. 
D)  whether the estimated coefficient is large relative to the standard error. 
A)  the efficiency of the t-test relative to the standard z-test. 
B)  the probability that the estimated coefficient is within the range of the standard error. 
C)  whether the estimated coefficient is independent of the standard error. 
D)  whether the estimated coefficient is large relative to the standard error.

Question 4

If the demand function for orange juice is expressed as Q = 2000 - 500p,where Q is quantity in gallons and p is price per gallon measured in dollars,then the demand for orange juice has a unitary elasticity when price equals

Accepted Answer

A)  $0. 
B)  $1. 
C)  $2. 
D)  $4. 
A)  $0. 
B)  $1. 
C)  $2. 
D)  $4.

Question 5

The goodness of the fit of a line is measured by the

Accepted Answer

A)  R² statistic. 
B)  t-statistic. 
C)  unbiased coefficient. 
D)  standard error. 
A)  R² statistic. 
B)  t-statistic. 
C)  unbiased coefficient. 
D)  standard error.

Question 6

-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 7

An estimation method is unbiased if it produces a(n)________ that equals the ________ on average.

Accepted Answer

A)  R²; t-statistic 
B)  estimated coefficient; true coefficient 
C)  error term; standard error 
D)  estimated coefficient; residual 
A)  R²; t-statistic 
B)  estimated coefficient; true coefficient 
C)  error term; standard error 
D)  estimated coefficient; residual

Question 8

If demand is inelastic

Accepted Answer

A)  then a 1% increase in price leads to a fall in quantity of greater than 1%. 
B)  then a 1% increase in price leads to a fall in quantity of less than 1%. 
C)  then a 1% increase in price leads to a fall in quantity of 1%. 
D)  then a 1% increase in price leads to a rise in quantity of less than 1%. 
A)  then a 1% increase in price leads to a fall in quantity of greater than 1%. 
B)  then a 1% increase in price leads to a fall in quantity of less than 1%. 
C)  then a 1% increase in price leads to a fall in quantity of 1%. 
D)  then a 1% increase in price leads to a rise in quantity of less than 1%.

Question 9

If the cross price elasticity of two goods is -3.5,then

Accepted Answer

A)  these two products are relatively elastic substitutes. 
B)  these two products are relatively inelastic substitutes. 
C)  these two products are relatively elastic complements. 
D)  these two products are relatively inelastic complements. 
A)  these two products are relatively elastic substitutes. 
B)  these two products are relatively inelastic substitutes. 
C)  these two products are relatively elastic complements. 
D)  these two products are relatively inelastic complements.

Question 10

When using extrapolation to forecast

Accepted Answer

A)  a time series of past observations is used. 
B)  there is a large error term in the results. 
C)  predictions can only be made about the future. 
D)  dummy variables can skew the results. 
A)  a time series of past observations is used. 
B)  there is a large error term in the results. 
C)  predictions can only be made about the future. 
D)  dummy variables can skew the results.

Question 11

What is the meaning of the statement "correlation does not mean causation"?

Accepted Answer

Just because two variables are correlate

Question 12

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 13

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.

Question 14

If the price elasticity of demand for a good is greater than one in absolute value,economists characterize that demand is

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  perfect. 
D)  vertical. 
A)  elastic. 
B)  inelastic. 
C)  perfect. 
D)  vertical.

Question 15

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 16

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)  .25. 
D)  .08. 
A)  8.0. 
B)  4.0. 
C)  .25. 
D)  .08.

Question 17

A horizontal demand curve for a good could arise because consumers

Accepted Answer

A)  are irrational. 
B)  are not sensitive to price changes. 
C)  view this good as identical to another good. 
D)  have no equivalent substitutes for this good. 
A)  are irrational. 
B)  are not sensitive to price changes. 
C)  view this good as identical to another good. 
D)  have no equivalent substitutes for this good.

Question 18

Omitted variables

Accepted Answer

A)  can cause hypothesis tests to be unreliable. 
B)  require multiple regression analyses to find. 
C)  are usually those with t-statistics less than the critical value. 
D)  are usually outside the confidence interval. 
A)  can cause hypothesis tests to be unreliable. 
B)  require multiple regression analyses to find. 
C)  are usually those with t-statistics less than the critical value. 
D)  are usually outside the confidence interval.

Question 19

If demand is perfectly elastic

Accepted Answer

A)  then a 1% increase in price leads to a fall in quantity of greater than 1%. 
B)  then a 1% increase in price leads to a fall in quantity of less than 1%. 
C)  then a 1% increase in prices then quantity demanded falls to zero. 
D)  then a 1% increase in price has no effect on quantity demanded. 
A)  then a 1% increase in price leads to a fall in quantity of greater than 1%. 
B)  then a 1% increase in price leads to a fall in quantity of less than 1%. 
C)  then a 1% increase in prices then quantity demanded falls to zero. 
D)  then a 1% increase in price has no effect on quantity demanded.

Question 20

The cross price elasticity of demand between two goods will be positive if

Accepted Answer

A)  the two goods are complements. 
B)  the two goods are substitutes. 
C)  the two goods are luxuries. 
D)  one of the goods is a luxury and the other is a necessity. 
A)  the two goods are complements. 
B)  the two goods are substitutes. 
C)  the two goods are luxuries. 
D)  one of the goods is a luxury and the other is a necessity.

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

A regression specification must include

The t-statistic measures

If the demand function for orange juice is expressed as Q = 2000 - 500p,where Q is quantity in gallons and p is price per gallon measured in dollars,then the demand for orange juice has a unitary elasticity when price equals

The goodness of the fit of a line is measured by the

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

An estimation method is unbiased if it produces a(n) that equals the on average.

If demand is inelastic

If the cross price elasticity of two goods is -3.5,then

When using extrapolation to forecast

What is the meaning of the statement "correlation does not mean causation"?

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

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

If the price elasticity of demand for a good is greater than one in absolute value,economists characterize that demand is

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

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

A horizontal demand curve for a good could arise because consumers

Omitted variables

If demand is perfectly elastic

The cross price elasticity of demand between two goods will be positive if

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

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

A regression specification must include

The t-statistic measures

If the demand function for orange juice is expressed as Q = 2000 - 500p,where Q is quantity in gallons and p is price per gallon measured in dollars,then the demand for orange juice has a unitary elasticity when price equals

The goodness of the fit of a line is measured by the

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

An estimation method is unbiased if it produces a(n)________ that equals the ________ on average.

If demand is inelastic

If the cross price elasticity of two goods is -3.5,then

When using extrapolation to forecast

What is the meaning of the statement "correlation does not mean causation"?

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

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

If the price elasticity of demand for a good is greater than one in absolute value,economists characterize that demand is

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

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

A horizontal demand curve for a good could arise because consumers

Omitted variables

If demand is perfectly elastic

The cross price elasticity of demand between two goods will be positive if

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

An estimation method is unbiased if it produces a(n) that equals the on average.

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