Question 1

Suppose demand is given by Q xd = 50 - 4Px + 6Py + Ax, where Px = $4, Py = $2, and Ax = $50.What is the quantity demanded of good x?

Accepted Answer

A) 96. 
B) 50. 
C) 46. 
D) 72. 
A) 96. 
B) 50. 
C) 46. 
D) 72.

Question 2

If quantity demanded for sneakers falls by 6% when price increases 20% we know that the absolute value of the own-price elasticity of sneakers is

Accepted Answer

A) 0.3 
B) 0.7 
C) 2.3 
D) 3.3 
A) 0.3 
B) 0.7 
C) 2.3 
D) 3.3

Question 3

Which of the following statements is incorrect?

Accepted Answer

A) If a firm decreases the price of its product, its total revenue will decrease. 
B) The own price elasticity of demand is constant at all points along a linear demand curve. 
C) As the price of X falls and we move down an individual's demand curve for X, the money income of the individual also changes. 
D) None of the statements associated with this question are correct. 
A) If a firm decreases the price of its product, its total revenue will decrease. 
B) The own price elasticity of demand is constant at all points along a linear demand curve. 
C) As the price of X falls and we move down an individual's demand curve for X, the money income of the individual also changes. 
D) None of the statements associated with this question are correct.

Question 4

The demand curve for a good is horizontal when it is:

Accepted Answer

A) a perfectly inelastic good. 
B) a unitary elastic good. 
C) a perfectly elastic good. 
D) an inferior good. 
A) a perfectly inelastic good. 
B) a unitary elastic good. 
C) a perfectly elastic good. 
D) an inferior good.

Question 5

The demand for video recorders has been estimated to be Qv = 134 - 1.07Pf + 46Pm -2.1Pv - 5I, where Qv is the quantity of video recorders, Pf denotes the price of video recorder film, Pm is the price of attending a movie, Pv is the price of video recorders, and I is income.Based on the estimated demand equation we can conclude:

Accepted Answer

A) video recorders are inferior goods. 
B) video recorder film is a substitute for video recorders. 
C) the demand for video recorders is inelastic. 
D) the demand for video recorders are neither inferior nor inelastic and video recorder film is not a substitute for video recorders. 
A) video recorders are inferior goods. 
B) video recorder film is a substitute for video recorders. 
C) the demand for video recorders is inelastic. 
D) the demand for video recorders are neither inferior nor inelastic and video recorder film is not a substitute for video recorders.

Question 6

The management of Local Cinema has estimated the monthly demand for tickets to be lnQ = 22,328 - 0.41 lnP + 0.5 lnM - 0.33 lnA + 100 lnPvcr, where Q = quantity of tickets demanded, P = price per ticket, M = income, A = advertising outlay, and Pvcr = price of a VCR tape rental.It is known that P = $5.50, M = $9,000, A = $900, and Pvcr = $3.00.Based on the information given, which of the following statements is false?

Accepted Answer

A) Advertising decreases the demand for movie tickets. 
B) Movies are normal goods. 
C) Movies are complements for VCR tapes. 
D) The advertising elasticity of demand for movie tickets is -0.33. 
A) Advertising decreases the demand for movie tickets. 
B) Movies are normal goods. 
C) Movies are complements for VCR tapes. 
D) The advertising elasticity of demand for movie tickets is -0.33.

Question 7

The demand for good X is estimated to be Qxd = 10, 000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income and AX is the amount of advertising on X.Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units.Based on this information, we know that the demand for good X is

Accepted Answer

A) elastic. 
B) inelastic. 
C) unitary elastic. 
D) neither elastic, inelastic nor unitary elastic. 
A) elastic. 
B) inelastic. 
C) unitary elastic. 
D) neither elastic, inelastic nor unitary elastic.

Question 8

The cross-price elasticity for textbooks and copies of old exams is -3.5.If the price of copies of old exams increases by 10 percent, what will happen to the quantity demanded of textbooks?

Accepted Answer

By definition, @#IMG-DLM& Subs

Question 9

Which of the following measures of fit penalizes a researcher for estimating many coefficients with relatively little data?

Accepted Answer

A) t-statistic. 
B) R-square. 
C) adjusted R-square. 
D) neither the t-statistic, R-square nor the adjusted R-square. 
A) t-statistic. 
B) R-square. 
C) adjusted R-square. 
D) neither the t-statistic, R-square nor the adjusted R-square.

Question 10

If the cross-price elasticity between ketchup and hamburgers is -2.5, a 2% increase in the price of ketchup will lead to a

Accepted Answer

A) 5% drop in quantity demanded of ketchup. 
B) 5% 5% drop in quantity demanded of hamburgers. 
C) 5% increase in quantity demanded of ketchup. 
D) 5% increase in demanded of hamburgers. 
A) 5% drop in quantity demanded of ketchup. 
B) 5% 5% drop in quantity demanded of hamburgers. 
C) 5% increase in quantity demanded of ketchup. 
D) 5% increase in demanded of hamburgers.

Question 11

When the own price elasticity of good X is -3.5 then total revenue can be increased by

Accepted Answer

A) increasing the price. 
B) decreasing the quantity supplied. 
C) decreasing the price. 
D) neither increase price, decrease price nor decrease quantity supplied. 
A) increasing the price. 
B) decreasing the quantity supplied. 
C) decreasing the price. 
D) neither increase price, decrease price nor decrease quantity supplied.

Question 12

Suppose the demand for good x is lnQxd = 21 - 0.8 lnPx - 1.6 lnPy + 6.2 lnM + 0.4 lnAx.Then we know good x is:

Accepted Answer

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

Question 13

Suppose the own-price elasticity of demand for good X is -0.5, and that the price of good X increases by 10%.What would you expect to happen to the total expenditures on good X?

Accepted Answer

A) increase. 
B) decrease. 
C) unchanged. 
D) neither increase, decrease nor remain unchanged. 
A) increase. 
B) decrease. 
C) unchanged. 
D) neither increase, decrease nor remain unchanged.

Question 14

Suppose the demand function is given by Qxd = 8Px0.5 Py0.25 M0.12 H.Then the demand for good x is:

Accepted Answer

A) inelastic. 
B) unitary. 
C) elastic. 
D) perfectly elastic. 
A) inelastic. 
B) unitary. 
C) elastic. 
D) perfectly elastic.

Question 15

The price elasticity of demand is -2.0 for a certain firm's product.If the firm raises price, the firm manager can expect total revenue to

Accepted Answer

A) decrease. 
B) increase. 
C) remain constant. 
D) either increase or remain constant, depending upon the size of the price increase. 
A) decrease. 
B) increase. 
C) remain constant. 
D) either increase or remain constant, depending upon the size of the price increase.

Question 16

The demand for Cinnamon Toast Crunch brand cereal is

Accepted Answer

A) equally elastic to the demand for cereal in general. 
B) less elastic than the demand for cereal in general. 
C) more elastic than the demand for cereal in general. 
D) none of the statements associated with this question are correct. 
A) equally elastic to the demand for cereal in general. 
B) less elastic than the demand for cereal in general. 
C) more elastic than the demand for cereal in general. 
D) none of the statements associated with this question are correct.

Question 17

Suppose the demand for a product is Q xd = 10 - lnPx then product x is

Accepted Answer

A) Elastic. 
B) Inelastic. 
C) Unitary elastic. 
D) Cannot be determined without more information. 
A) Elastic. 
B) Inelastic. 
C) Unitary elastic. 
D) Cannot be determined without more information.

Question 18

The demand for good X is estimated to be Qxd = 10,000 - 4PX + 5PY + 2M + AX where PX is the price of X, PY is the price of good Y, M is income and AX is the amount of advertising on X.Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units.What is the demand curve for good X?

Accepted Answer

A) 61,500. 
B) 61,300. 
C) 61,300 - 4PX. 
D) 61,500 - 4PX. 
A) 61,500. 
B) 61,300. 
C) 61,300 - 4PX. 
D) 61,500 - 4PX.

Question 19

Which of the following provides a measure of the overall fit of a regression?

Accepted Answer

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

Question 20

Lemonade, a good with many close substitutes, should have an own-price elasticity that is:

Accepted Answer

A) unitary. 
B) relatively elastic. 
C) relatively inelastic. 
D) perfectly inelastic. 
A) unitary. 
B) relatively elastic. 
C) relatively inelastic. 
D) perfectly inelastic.

Suppose demand is given by Q _x^d = 50 - 4P_x + 6P_y + A_x, where P_x = $4, P_y = $2, and A_x = $50.What is the quantity demanded of good x?

If quantity demanded for sneakers falls by 6% when price increases 20% we know that the absolute value of the own-price elasticity of sneakers is

Which of the following statements is incorrect?

The demand curve for a good is horizontal when it is:

The cross-price elasticity for textbooks and copies of old exams is -3.5.If the price of copies of old exams increases by 10 percent, what will happen to the quantity demanded of textbooks?

Which of the following measures of fit penalizes a researcher for estimating many coefficients with relatively little data?

If the cross-price elasticity between ketchup and hamburgers is -2.5, a 2% increase in the price of ketchup will lead to a

When the own price elasticity of good X is -3.5 then total revenue can be increased by

Suppose the demand for good x is lnQ_x^d = 21 - 0.8 lnP_x - 1.6 lnP_y + 6.2 lnM + 0.4 lnA_x.Then we know good x is:

Suppose the own-price elasticity of demand for good X is -0.5, and that the price of good X increases by 10%.What would you expect to happen to the total expenditures on good X?

Suppose the demand function is given by Q_x^d = 8P_x^0.5 P_y^0.25 M^0.12 H.Then the demand for good x is:

The price elasticity of demand is -2.0 for a certain firm's product.If the firm raises price, the firm manager can expect total revenue to

The demand for Cinnamon Toast Crunch brand cereal is

Suppose the demand for a product is Q _x^d = 10 - lnP_x then product x is

Which of the following provides a measure of the overall fit of a regression?

Lemonade, a good with many close substitutes, should have an own-price elasticity that is:

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

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Exam 3: Quantitative Demand Analysis

Suppose demand is given by Q xd = 50 - 4Px + 6Py + Ax, where Px = $4, Py = $2, and Ax = $50.What is the quantity demanded of good x?

If quantity demanded for sneakers falls by 6% when price increases 20% we know that the absolute value of the own-price elasticity of sneakers is

Which of the following statements is incorrect?

The demand curve for a good is horizontal when it is:

The cross-price elasticity for textbooks and copies of old exams is -3.5.If the price of copies of old exams increases by 10 percent, what will happen to the quantity demanded of textbooks?

Which of the following measures of fit penalizes a researcher for estimating many coefficients with relatively little data?

If the cross-price elasticity between ketchup and hamburgers is -2.5, a 2% increase in the price of ketchup will lead to a

When the own price elasticity of good X is -3.5 then total revenue can be increased by

Suppose the demand for good x is lnQxd = 21 - 0.8 lnPx - 1.6 lnPy + 6.2 lnM + 0.4 lnAx.Then we know good x is:

Suppose the own-price elasticity of demand for good X is -0.5, and that the price of good X increases by 10%.What would you expect to happen to the total expenditures on good X?

Suppose the demand function is given by Qxd = 8Px0.5 Py0.25 M0.12 H.Then the demand for good x is:

The price elasticity of demand is -2.0 for a certain firm's product.If the firm raises price, the firm manager can expect total revenue to

The demand for Cinnamon Toast Crunch brand cereal is

Suppose the demand for a product is Q xd = 10 - lnPx then product x is

Which of the following provides a measure of the overall fit of a regression?

Lemonade, a good with many close substitutes, should have an own-price elasticity that is:

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

Suppose demand is given by Q _x^d = 50 - 4P_x + 6P_y + A_x, where P_x = $4, P_y = $2, and A_x = $50.What is the quantity demanded of good x?

Suppose the demand for good x is lnQ_x^d = 21 - 0.8 lnP_x - 1.6 lnP_y + 6.2 lnM + 0.4 lnA_x.Then we know 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 demand for good x is:

Suppose the demand for a product is Q _x^d = 10 - lnP_x then product x is