Question 1

We would expect the demand for jeans to be:

Accepted Answer

A) more elastic than the demand for clothing. 
B) less elastic than the demand for clothing. 
C) the same as the demand for clothing. 
D) neither more elastic, less elastic nor the same elasticity of demand for clothing. 
A) more elastic than the demand for clothing. 
B) less elastic than the demand for clothing. 
C) the same as the demand for clothing. 
D) neither more elastic, less elastic nor the same elasticity of demand for clothing.

Question 2

If the demand function for a particular good is Q = 20 - 8P, then the price elasticity of demand (in absolute value) at a price of $1 is

Accepted Answer

A) 8. 
B) 2. 
C) 2/3. 
D) 1/8. 
A) 8. 
B) 2. 
C) 2/3. 
D) 1/8.

Question 3

The demand for good X has been estimated to be lnQxd = 100 - 2.5 lnPX + 4 lnPY + lnM.The income elasticity of good X is

Accepted Answer

A) 4.0. 
B) 1.0. 
C) 2.0. 
D) -2.5. 
A) 4.0. 
B) 1.0. 
C) 2.0. 
D) -2.5.

Question 4

Which of the following is used to determine the statistical significance of a regression coefficient?

Accepted Answer

A) t-statistic. 
B) F-statistic. 
C) R-square. 
D) adjusted R-square. 
A) t-statistic. 
B) F-statistic. 
C) R-square. 
D) adjusted R-square.

Question 5

If the cross-price elasticity between good X & Y is zero, we know the goods are:

Accepted Answer

A) independent. 
B) complements. 
C) inelastic. 
D) substitutes. 
A) independent. 
B) complements. 
C) inelastic. 
D) substitutes.

Question 6

Suppose the demand function is given by Qxd = 8Px0.5 Py0.25 M0.12 H.Then the cross-price elasticity between goods x and y is:

Accepted Answer

A) 4.00. 
B) 0.25. 
C) 0.50. 
D) 8.33. 
A) 4.00. 
B) 0.25. 
C) 0.50. 
D) 8.33.

Question 7

An income elasticity less than zero tells us that the good is:

Accepted Answer

A) a normal good. 
B) a Giffen good. 
C) an inferior good. 
D) an inelastic good. 
A) a normal good. 
B) a Giffen good. 
C) an inferior good. 
D) an inelastic good.

Question 8

When marginal revenue is negative for a linear (inverse) demand function, increases in output will cause total revenues to

Accepted Answer

A) increase. 
B) decrease. 
C) remain unchanged. 
D) there is not sufficient information to classify the elasticity of demand. 
A) increase. 
B) decrease. 
C) remain unchanged. 
D) there is not sufficient information to classify the elasticity of demand.

Question 9

From the regression output, the predicted regression line is

Accepted Answer

A) QRd = 1664.46 - 6.68PR + 9.73M. 
B) PR = 1664.46 - 6.68QR + 9.73M. 
C) QRd = 2.32 - 6.68PR + 9.73M. 
D) there is not sufficient information to answer the question. 
A) QRd = 1664.46 - 6.68PR + 9.73M. 
B) PR = 1664.46 - 6.68QR + 9.73M. 
C) QRd = 2.32 - 6.68PR + 9.73M. 
D) there is not sufficient information to answer the question.

Question 10

Which of the following is not the important factor that affects the magnitude of the own price elasticity of a good?

Accepted Answer

A) available substitutes. 
B) supply of the good. 
C) time. 
D) expenditure share. 
A) available substitutes. 
B) supply of the good. 
C) time. 
D) expenditure share.

Question 11

Each week Bill buys exactly 7 bottles of cola regardless of its price.Bill's own price elasticity of demand for cola in absolute value is:

Accepted Answer

A) greater than one. 
B) less than one. 
C) one. 
D) zero. 
A) greater than one. 
B) less than one. 
C) one. 
D) zero.

Question 12

Which of the following is a correct statement about the own-price elasticity of demand?

Accepted Answer

A) Demand tends to be more inelastic in the short-term than in the long-term. 
B) Demand tends to be more elastic as more substitutes are available. 
C) Demand tends to be more inelastic for goods that comprise a smaller share of a consumer's budget. 
D) All of the statements are correct. 
A) Demand tends to be more inelastic in the short-term than in the long-term. 
B) Demand tends to be more elastic as more substitutes are available. 
C) Demand tends to be more inelastic for goods that comprise a smaller share of a consumer's budget. 
D) All of the statements are correct.

Question 13

You are the manager of a supermarket, and know that the income elasticity of peanut butter is exactly -0.7.Due to the recession, you expect incomes to drop by 15% next year.How should you adjust your purchase of peanut butter?

Accepted Answer

A) Buy 10.5% more peanut butter. 
B) Buy 2.14% more peanut butter. 
C) Buy 6.2% less peanut butter. 
D) Buy 9.8% less peanut butter. 
A) Buy 10.5% more peanut butter. 
B) Buy 2.14% more peanut butter. 
C) Buy 6.2% less peanut butter. 
D) Buy 9.8% less peanut butter.

Question 14

The following estimates have been obtained for the market demand for cereal:

Accepted Answer

@#IMG-DLM& , where Q is the quantity of cereal, P

Question 15

When a demand curve is linear,

Accepted Answer

A) demand is elastic at low prices. 
B) demand is inelastic at low prices. 
C) demand is unitary elastic at low prices. 
D) the elasticity is constant at all prices. 
A) demand is elastic at low prices. 
B) demand is inelastic at low prices. 
C) demand is unitary elastic at low prices. 
D) the elasticity is constant at all prices.

Question 16

The cross-price advertising of demand for books and magazines is -2.0.If the price of magazines decreases by 10 percent, the quantity demanded of books will

Accepted Answer

A) fall by 2.0 percent. 
B) rise by 2.0 percent. 
C) fall by 20 percent. 
D) rise by 20 percent. 
A) fall by 2.0 percent. 
B) rise by 2.0 percent. 
C) fall by 20 percent. 
D) rise by 20 percent.

Question 17

You work for an unemployment agency that distributes unemployment checks to unemployed workers in your state.Your boss recently learned that the President proposed a 21 percent increase in the minimum wage, and wants you to provide her with an estimate of the number of additional workers who will file for unemployment compensation claims next year if the bill passes.Based on library research at a nearby university, you learn that about 200,000 workers in your state earn at or below the current minimum wage.Further library research turns up a study that reports the own price elasticity of demand for minimum wage earners to be -0.30.Based on your findings, how many additional workers do you think will file unemployment claims in your state?

Accepted Answer

Since the elasticity of demand for minim

Question 18

Determine the intercept coefficient (point E) and whether that estimate is statistically significant at the 5 percent level.

Accepted Answer

A) 1,664.46 and statistically significant since the p-value is less than 5 percent. 
B) 2.32 and statistically significant since the t statistic is greater than 2 in absolute value. 
C) 1,664.46 and statistically insignificant since the p-value is less than 5 percent. 
D) 2.32 and statistically insignificant since the t statistic is less than 2 in absolute value. 
A) 1,664.46 and statistically significant since the p-value is less than 5 percent. 
B) 2.32 and statistically significant since the t statistic is greater than 2 in absolute value. 
C) 1,664.46 and statistically insignificant since the p-value is less than 5 percent. 
D) 2.32 and statistically insignificant since the t statistic is less than 2 in absolute value.

Question 19

If the demand function for a particular good is Q = 25 - 10P, then the price elasticity of demand (in absolute value) at a price of $1 is

Accepted Answer

A) 8. 
B) 2. 
C) 2/3. 
D) 1/8. 
A) 8. 
B) 2. 
C) 2/3. 
D) 1/8.

Question 20

The cross price elasticity of demand between goods X and Y is -3.5.If the price of X decreases by 7%, the quantity demanded of Y will:

Accepted Answer

A) decrease by 24.5%. 
B) decrease by 2.45%. 
C) increase by 24.5%. 
D) increase by 2.45%. 
A) decrease by 24.5%. 
B) decrease by 2.45%. 
C) increase by 24.5%. 
D) increase by 2.45%.

We would expect the demand for jeans to be:

If the demand function for a particular good is Q = 20 - 8P, then the price elasticity of demand (in absolute value) at a price of $1 is

The demand for good X has been estimated to be lnQ_x^d = 100 - 2.5 lnP_X + 4 lnP_Y + lnM.The income elasticity of good X is

Which of the following is used to determine the statistical significance of a regression coefficient?

If the cross-price elasticity between good X & Y is zero, we know the goods are:

Suppose the demand function is given by Q_x^d = 8P_x^0.5 P_y^0.25 M^0.12 H.Then the cross-price elasticity between goods x and y is:

An income elasticity less than zero tells us that the good is:

When marginal revenue is negative for a linear (inverse) demand function, increases in output will cause total revenues to

From the regression output, the predicted regression line is

Which of the following is not the important factor that affects the magnitude of the own price elasticity of a good?

Each week Bill buys exactly 7 bottles of cola regardless of its price.Bill's own price elasticity of demand for cola in absolute value is:

Which of the following is a correct statement about the own-price elasticity of demand?

You are the manager of a supermarket, and know that the income elasticity of peanut butter is exactly -0.7.Due to the recession, you expect incomes to drop by 15% next year.How should you adjust your purchase of peanut butter?

The following estimates have been obtained for the market demand for cereal:

When a demand curve is linear,

The cross-price advertising of demand for books and magazines is -2.0.If the price of magazines decreases by 10 percent, the quantity demanded of books will

Determine the intercept coefficient (point E) and whether that estimate is statistically significant at the 5 percent level.

If the demand function for a particular good is Q = 25 - 10P, then the price elasticity of demand (in absolute value) at a price of $1 is

The cross price elasticity of demand between goods X and Y is -3.5.If the price of X decreases by 7%, the quantity demanded of Y will:

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Exam 3: Quantitative Demand Analysis

We would expect the demand for jeans to be:

If the demand function for a particular good is Q = 20 - 8P, then the price elasticity of demand (in absolute value) at a price of $1 is

The demand for good X has been estimated to be lnQxd = 100 - 2.5 lnPX + 4 lnPY + lnM.The income elasticity of good X is

Which of the following is used to determine the statistical significance of a regression coefficient?

If the cross-price elasticity between good X & Y is zero, we know the goods are:

Suppose the demand function is given by Qxd = 8Px0.5 Py0.25 M0.12 H.Then the cross-price elasticity between goods x and y is:

An income elasticity less than zero tells us that the good is:

When marginal revenue is negative for a linear (inverse) demand function, increases in output will cause total revenues to

From the regression output, the predicted regression line is

Which of the following is not the important factor that affects the magnitude of the own price elasticity of a good?

Each week Bill buys exactly 7 bottles of cola regardless of its price.Bill's own price elasticity of demand for cola in absolute value is:

Which of the following is a correct statement about the own-price elasticity of demand?

You are the manager of a supermarket, and know that the income elasticity of peanut butter is exactly -0.7.Due to the recession, you expect incomes to drop by 15% next year.How should you adjust your purchase of peanut butter?

The following estimates have been obtained for the market demand for cereal:

When a demand curve is linear,

The cross-price advertising of demand for books and magazines is -2.0.If the price of magazines decreases by 10 percent, the quantity demanded of books will

Determine the intercept coefficient (point E) and whether that estimate is statistically significant at the 5 percent level.

If the demand function for a particular good is Q = 25 - 10P, then the price elasticity of demand (in absolute value) at a price of $1 is

The cross price elasticity of demand between goods X and Y is -3.5.If the price of X decreases by 7%, the quantity demanded of Y will:

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

The demand for good X has been estimated to be lnQ_x^d = 100 - 2.5 lnP_X + 4 lnP_Y + lnM.The income elasticity of good X is

Suppose the demand function is given by Q_x^d = 8P_x^0.5 P_y^0.25 M^0.12 H.Then the cross-price elasticity between goods x and y is: