Question 1

Which of the following can be used to quantify the overall statistical significance 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 2

You are the manager of a popular shoe company.You know that the advertising elasticity of demand for your product is 0.15.How much will you have to increase advertising in order to increase demand by 10%?

Accepted Answer

A) 0.02%. 
B) 38.6%. 
C) 66.7%. 
D) 4.3%. 
A) 0.02%. 
B) 38.6%. 
C) 66.7%. 
D) 4.3%.

Question 3

When the price of butter was "low," consumers spent $5 billion annually on its consumption.When the price doubled consumer expenditures increased to $7 billion.Recently you read that this means that the demand curve for butter is upward sloping.Do you agree? Explain.

Accepted Answer

Disagree.Let P be the initial price and

Question 4

Suppose the demand for sunscreen (X) has been estimated to be

Accepted Answer

@#IMG-DLM& , where @#IMG-DLM& denotes the average hours of s

Question 5

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, the income elasticity of good X is

Accepted Answer

A) 0.008. 
B) 0.082. 
C) 0.82. 
D) 8.2. 
A) 0.008. 
B) 0.082. 
C) 0.82. 
D) 8.2.

Question 6

If the own price elasticity of demand is infinite in absolute value, then

Accepted Answer

A) demand is perfectly inelastic. 
B) the demand curve is horizontal. 
C) consumers do not respond at all to changes in price. 
D) demand is neither perfectly inelastic nor is the demand curve horizontal. 
A) demand is perfectly inelastic. 
B) the demand curve is horizontal. 
C) consumers do not respond at all to changes in price. 
D) demand is neither perfectly inelastic nor is the demand curve horizontal.

Question 7

The demand for food (a broad group) is more

Accepted Answer

A) elastic than the demand for beef (specific commodity). 
B) inelastic than the demand for beef (specific commodity). 
C) sensitive to price changes than the demand for beef. 
D) responsive to price change than the demand for beef. 
A) elastic than the demand for beef (specific commodity). 
B) inelastic than the demand for beef (specific commodity). 
C) sensitive to price changes than the demand for beef. 
D) responsive to price change than the demand for beef.

Question 8

A consumer spends all of her income on only one good.What is the income elasticity of demand for this good? What is the own price elasticity of demand for this good?

Accepted Answer

Since PQ = M, we can solve for

Question 9

If the income elasticity for lobster is .6, a 25% increase in income will lead to a

Accepted Answer

A) 6% drop in demand for lobster. 
B) 2.4% increase in demand for lobster. 
C) 15% increase in demand for lobster. 
D) 42% increase in demand for lobster. 
A) 6% drop in demand for lobster. 
B) 2.4% increase in demand for lobster. 
C) 15% increase in demand for lobster. 
D) 42% increase in demand for lobster.

Question 10

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.Determine the own-price elasticity of demand for movie tickets.

Accepted Answer

A) -0.29. 
B) -0.32. 
C) -0.39. 
D) -0.41. 
A) -0.29. 
B) -0.32. 
C) -0.39. 
D) -0.41.

Question 11

Several years ago the National Association of Broadcasters imposed restrictions on the amount of nonprogram material (commercials) that could be aired during children's television shows, effectively reducing the quantity of advertising allowed during children's viewing hours by 33 percent.Within four months, the price of a minute of advertising on network television increased by roughly 14 percent.What impact do you think this had on the revenues of the networks?

Accepted Answer

The own-price elasticity of demand for a

Question 12

The demand function in the above table is QXd = 100 - 2PX.Based on this information, when QX = 80, the price, PX, (point A) is

Accepted Answer

A) $5. 
B) $10. 
C) $15. 
D) $20. 
A) $5. 
B) $10. 
C) $15. 
D) $20.

Question 13

The demand for good X is given by lnQxd = 120 - 0.9 lnPx + 1.5 lnPy - 0.7 lnM.Which of the following statements is correct?

Accepted Answer

A) X has constant income elasticity. 
B) An economic downturn will increase demand for X. 
C) A 15% increase in income would increase demand for X by 10.5%. 
D) X has a constant income elasticity and an economic downturn will increase the demand for X. 
A) X has constant income elasticity. 
B) An economic downturn will increase demand for X. 
C) A 15% increase in income would increase demand for X by 10.5%. 
D) X has a constant income elasticity and an economic downturn will increase the demand for X.

Question 14

If the cross-price elasticity between good A & B is negative, we know the goods are:

Accepted Answer

A) inferior goods. 
B) complements. 
C) inelastic. 
D) substitutes. 
A) inferior goods. 
B) complements. 
C) inelastic. 
D) substitutes.

Question 15

If the price of pork chops falls from $8 to $6, and this leads to an increase in demand for apple sauce from 100 to 140 jars, what is the cross price-elasticity of apple sauce and pork chops at a pork chop price of $6?

Accepted Answer

A) -0.1.17. 
B) 2.71. 
C) 0.42. 
D) -0.86. 
A) -0.1.17. 
B) 2.71. 
C) 0.42. 
D) -0.86.

Question 16

Suppose the demand for a product is Qxd = 12 - 3 lnPx then product x is

Accepted Answer

A) inelastic. 
B) unitary elastic. 
C) elastic. 
D) cannot be determined without more information. 
A) inelastic. 
B) unitary elastic. 
C) elastic. 
D) cannot be determined without more information.

Question 17

The elasticity of demand for gasoline has been estimated to be -2.0, and the standard error is 0.25.The t-statistic for the estimated elasticity of demand for gasoline is

Accepted Answer

A) -8, indicating a statistically significant elasticity estimate at the 95% confidence level. 
B) -0.5, indicating a statistically insignificant elasticity estimate at the 95% confidence level. 
C) 8, indicating a statistically insignificant elasticity estimate at the 95% confidence level. 
D) 0.5, indicating a statistically significant elasticity estimate at the 95% confidence level. 
A) -8, indicating a statistically significant elasticity estimate at the 95% confidence level. 
B) -0.5, indicating a statistically insignificant elasticity estimate at the 95% confidence level. 
C) 8, indicating a statistically insignificant elasticity estimate at the 95% confidence level. 
D) 0.5, indicating a statistically significant elasticity estimate at the 95% confidence level.

Question 18

A study has estimated the effect of changes in interest rates and consumer confidence on the demand for money to be: lnM = 14.666 + .021 lnC - 0.036 lnr, where M denotes real money balances, C is an index of consumer confidence, and r is the interest rate paid on bank deposits.Based on this study we know that the interest elasticity is:

Accepted Answer

A) unitary. 
B) zero. 
C) very elastic. 
D) very inelastic. 
A) unitary. 
B) zero. 
C) very elastic. 
D) very inelastic.

Question 19

The demand function in the above table is QXd = 100 - 2PX.Based on this information, compute the total revenue when QX = 20 (point D).

Accepted Answer

A) $750. 
B) $800. 
C) $850. 
D) $900. 
A) $750. 
B) $800. 
C) $850. 
D) $900.

Question 20

The elasticity of variable G with respect to variable S is defined as

Accepted Answer

A) the percentage change in variable G that results from a given percentage change in variable S. 
B) the percentage change in variable G that results from a given change in variable S. 
C) the change in variable G that results from a given percentage change in variable S. 
D) the change in variable G that results from a given change in variable S. 
A) the percentage change in variable G that results from a given percentage change in variable S. 
B) the percentage change in variable G that results from a given change in variable S. 
C) the change in variable G that results from a given percentage change in variable S. 
D) the change in variable G that results from a given change in variable S.

Which of the following can be used to quantify the overall statistical significance of a regression?

You are the manager of a popular shoe company.You know that the advertising elasticity of demand for your product is 0.15.How much will you have to increase advertising in order to increase demand by 10%?

When the price of butter was "low," consumers spent $5 billion annually on its consumption.When the price doubled consumer expenditures increased to $7 billion.Recently you read that this means that the demand curve for butter is upward sloping.Do you agree? Explain.

Suppose the demand for sunscreen (X) has been estimated to be

If the own price elasticity of demand is infinite in absolute value, then

The demand for food (a broad group) is more

A consumer spends all of her income on only one good.What is the income elasticity of demand for this good? What is the own price elasticity of demand for this good?

If the income elasticity for lobster is .6, a 25% increase in income will lead to a

The demand function in the above table is Q_X^d = 100 - 2P_X.Based on this information, when Q_X = 80, the price, P_X, (point A) is

The demand for good X is given by lnQ_x^d = 120 - 0.9 lnP_x + 1.5 lnP_y - 0.7 lnM.Which of the following statements is correct?

If the cross-price elasticity between good A & B is negative, we know the goods are:

If the price of pork chops falls from $8 to $6, and this leads to an increase in demand for apple sauce from 100 to 140 jars, what is the cross price-elasticity of apple sauce and pork chops at a pork chop price of $6?

Suppose the demand for a product is Q_x^d = 12 - 3 lnP_x then product x is

The elasticity of demand for gasoline has been estimated to be -2.0, and the standard error is 0.25.The t-statistic for the estimated elasticity of demand for gasoline is

The demand function in the above table is Q_X^d = 100 - 2P_X.Based on this information, compute the total revenue when Q_X = 20 (point D).

The elasticity of variable G with respect to variable S is defined as

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

Which of the following can be used to quantify the overall statistical significance of a regression?

You are the manager of a popular shoe company.You know that the advertising elasticity of demand for your product is 0.15.How much will you have to increase advertising in order to increase demand by 10%?

When the price of butter was "low," consumers spent $5 billion annually on its consumption.When the price doubled consumer expenditures increased to $7 billion.Recently you read that this means that the demand curve for butter is upward sloping.Do you agree? Explain.

Suppose the demand for sunscreen (X) has been estimated to be

If the own price elasticity of demand is infinite in absolute value, then

The demand for food (a broad group) is more

A consumer spends all of her income on only one good.What is the income elasticity of demand for this good? What is the own price elasticity of demand for this good?

If the income elasticity for lobster is .6, a 25% increase in income will lead to a

The demand function in the above table is QXd = 100 - 2PX.Based on this information, when QX = 80, the price, PX, (point A) is

The demand for good X is given by lnQxd = 120 - 0.9 lnPx + 1.5 lnPy - 0.7 lnM.Which of the following statements is correct?

If the cross-price elasticity between good A & B is negative, we know the goods are:

If the price of pork chops falls from $8 to $6, and this leads to an increase in demand for apple sauce from 100 to 140 jars, what is the cross price-elasticity of apple sauce and pork chops at a pork chop price of $6?

Suppose the demand for a product is Qxd = 12 - 3 lnPx then product x is

The elasticity of demand for gasoline has been estimated to be -2.0, and the standard error is 0.25.The t-statistic for the estimated elasticity of demand for gasoline is

The demand function in the above table is QXd = 100 - 2PX.Based on this information, compute the total revenue when QX = 20 (point D).

The elasticity of variable G with respect to variable S is defined as

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 function in the above table is Q_X^d = 100 - 2P_X.Based on this information, when Q_X = 80, the price, P_X, (point A) is

The demand for good X is given by lnQ_x^d = 120 - 0.9 lnP_x + 1.5 lnP_y - 0.7 lnM.Which of the following statements is correct?

Suppose the demand for a product is Q_x^d = 12 - 3 lnP_x then product x is

The demand function in the above table is Q_X^d = 100 - 2P_X.Based on this information, compute the total revenue when Q_X = 20 (point D).