Question 1

Demand is more inelastic in the short-term because consumers:

Accepted Answer

A) are impatient. 
B) have no time to find available substitutes. 
C) are present-oriented. 
D) are neither impatient, have no time to find available substitutes nor are present-oriented. 
A) are impatient. 
B) have no time to find available substitutes. 
C) are present-oriented. 
D) are neither impatient, have no time to find available substitutes nor are present-oriented.

Question 2

As a general rule-of-thumb, a manager can be 95 percent confident that the true value of the underlying parameter in the regression is not zero, when the absolute value of the t-statistic is

Accepted Answer

A) greater than zero. 
B) greater than or equal to one. 
C) greater than or equal to two. 
D) none of the statements associated with this question are correct. 
A) greater than zero. 
B) greater than or equal to one. 
C) greater than or equal to two. 
D) none of the statements associated with this question are correct.

Question 3

When marginal revenue is negative, demand is

Accepted Answer

A) elastic. 
B) inelastic. 
C) unit elastic. 
D) there is not sufficient information to classify the elasticity of demand. 
A) elastic. 
B) inelastic. 
C) unit elastic. 
D) there is not sufficient information to classify the elasticity of demand.

Question 4

Suppose a regression with 51 observations returns a regression sum of squares of 56,000 and a total sum of squares of 250,000.The associated residual sum of squares is

Accepted Answer

A) 194,000. 
B) 200,000. 
C) 150,000. 
D) None of the choices. 
A) 194,000. 
B) 200,000. 
C) 150,000. 
D) None of the choices.

Question 5

Suppose Q xd = 10,000 - 2 Px + 3 Py - 4.5M, where Px = $100, Py = $50, and M = $2,000.What is the own-price elasticity of demand?

Accepted Answer

A) -2.34. 
B) -0.78. 
C) -0.21. 
D) -1.21. 
A) -2.34. 
B) -0.78. 
C) -0.21. 
D) -1.21.

Question 6

The elasticity which shows the responsiveness of the demand for a good due to changes in the price of a related good is the:

Accepted Answer

A) own-price elasticity. 
B) income elasticity. 
C) log-linear elasticity. 
D) cross-price elasticity. 
A) own-price elasticity. 
B) income elasticity. 
C) log-linear elasticity. 
D) cross-price elasticity.

Question 7

The lower the standard error,

Accepted Answer

A) the less confident the manager can be that the parameter estimates reflect the true values. 
B) the more confident the manager can be that the parameter estimates reflect the true values. 
C) the more precisely the parameter estimates the true values. 
D) the less precisely the parameter estimates the true values. 
A) the less confident the manager can be that the parameter estimates reflect the true values. 
B) the more confident the manager can be that the parameter estimates reflect the true values. 
C) the more precisely the parameter estimates the true values. 
D) the less precisely the parameter estimates the true values.

Question 8

When the price of sugar was "low", consumers in the U.S.spent a total of $3 billion annually on sugar consumption.When the price doubled, consumer expenditures remained at $3 billion annually.This data indicates that:

Accepted Answer

A) The demand for sugar is inelastic. 
B) The demand curve for sugar is upward sloping. 
C) The quantity demanded of sugar increased. 
D) None of the statements associated with this question are correct. 
A) The demand for sugar is inelastic. 
B) The demand curve for sugar is upward sloping. 
C) The quantity demanded of sugar increased. 
D) None of the statements associated with this question are correct.

Question 9

The demand for which of the following commodities is likely to be more inelastic?

Accepted Answer

A) Soft drinks. 
B) Beverages. 
C) Cola drinks. 
D) Pepsi Cola. 
A) Soft drinks. 
B) Beverages. 
C) Cola drinks. 
D) Pepsi Cola.

Question 10

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, good X is

Accepted Answer

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

Question 11

Suppose the own-price elasticity of demand for good X is -0.5, and that the price of good X increases by 10%.We would expect the quantity demanded of good X to

Accepted Answer

A) increase by 5%. 
B) increase by 20%. 
C) decrease by 5%. 
D) decrease by 20%. 
A) increase by 5%. 
B) increase by 20%. 
C) decrease by 5%. 
D) decrease by 20%.

Question 12

If the cross-price elasticity between good X & Y is positive, 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 13

Assume that the price elasticity of demand is -2 for a certain firm's product.If the firm raises price, the firm's managers 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 14

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

Accepted Answer

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

Question 15

A price elasticity of infinity corresponds to a demand curve that is:

Accepted Answer

A) Horizontal 
B) Downward sloping with a slope always equal to 1. 
C) Vertical 
D) Either vertical or horizontal. 
A) Horizontal 
B) Downward sloping with a slope always equal to 1. 
C) Vertical 
D) Either vertical or horizontal.

Question 16

A price elasticity of zero corresponds to a demand curve that is:

Accepted Answer

A) Horizontal 
B) Downward sloping with a slope always equal to 1. 
C) Vertical 
D) Either vertical or horizontal. 
A) Horizontal 
B) Downward sloping with a slope always equal to 1. 
C) Vertical 
D) Either vertical or horizontal.

Question 17

If the cross-price elasticity between ketchup and hamburgers is -1.2, a 4% increase in the price of ketchup will lead to a 4.8%:

Accepted Answer

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

Question 18

The demand for good X has been estimated by Qxd = 6 - 2Px + 5Py.Suppose that good X sells at $3 per unit and good Y sells for $2 per unit.Calculate the own price elasticity.

Accepted Answer

A) -0.3. 
B) -0.4. 
C) -0.5. 
D) -0.6. 
A) -0.3. 
B) -0.4. 
C) -0.5. 
D) -0.6.

Question 19

Suppose the own-price elasticity of demand for good X is -5, and that the quantity of good X decreases by 5%.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 20

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

Accepted Answer

A) demand is perfectly elastic. 
B) the demand curve is vertical. 
C) consumers do not respond at all to changes in price. 
D) the demand curve is vertical and consumers do not respond at all to changes in price. 
A) demand is perfectly elastic. 
B) the demand curve is vertical. 
C) consumers do not respond at all to changes in price. 
D) the demand curve is vertical and consumers do not respond at all to changes in price.

Demand is more inelastic in the short-term because consumers:

As a general rule-of-thumb, a manager can be 95 percent confident that the true value of the underlying parameter in the regression is not zero, when the absolute value of the t-statistic is

When marginal revenue is negative, demand is

Suppose a regression with 51 observations returns a regression sum of squares of 56,000 and a total sum of squares of 250,000.The associated residual sum of squares is

Suppose Q _x^d = 10,000 - 2 P_x + 3 P_y - 4.5M, where P_x = $100, P_y = $50, and M = $2,000.What is the own-price elasticity of demand?

The elasticity which shows the responsiveness of the demand for a good due to changes in the price of a related good is the:

The lower the standard error,

When the price of sugar was "low", consumers in the U.S.spent a total of $3 billion annually on sugar consumption.When the price doubled, consumer expenditures remained at $3 billion annually.This data indicates that:

The demand for which of the following commodities is likely to be more inelastic?

Suppose the own-price elasticity of demand for good X is -0.5, and that the price of good X increases by 10%.We would expect the quantity demanded of good X to

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

Assume that the price elasticity of demand is -2 for a certain firm's product.If the firm raises price, the firm's managers can expect total revenue to:

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 goods x and y are:

A price elasticity of infinity corresponds to a demand curve that is:

A price elasticity of zero corresponds to a demand curve that is:

If the cross-price elasticity between ketchup and hamburgers is -1.2, a 4% increase in the price of ketchup will lead to a 4.8%:

The demand for good X has been estimated by Q_x^d = 6 - 2P_x + 5P_y.Suppose that good X sells at $3 per unit and good Y sells for $2 per unit.Calculate the own price elasticity.

Suppose the own-price elasticity of demand for good X is -5, and that the quantity of good X decreases by 5%.What would you expect to happen to the total expenditures on good X?

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

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

Demand is more inelastic in the short-term because consumers:

As a general rule-of-thumb, a manager can be 95 percent confident that the true value of the underlying parameter in the regression is not zero, when the absolute value of the t-statistic is

When marginal revenue is negative, demand is

Suppose a regression with 51 observations returns a regression sum of squares of 56,000 and a total sum of squares of 250,000.The associated residual sum of squares is

Suppose Q xd = 10,000 - 2 Px + 3 Py - 4.5M, where Px = $100, Py = $50, and M = $2,000.What is the own-price elasticity of demand?

The elasticity which shows the responsiveness of the demand for a good due to changes in the price of a related good is the:

The lower the standard error,

When the price of sugar was "low", consumers in the U.S.spent a total of $3 billion annually on sugar consumption.When the price doubled, consumer expenditures remained at $3 billion annually.This data indicates that:

The demand for which of the following commodities is likely to be more inelastic?

Suppose the own-price elasticity of demand for good X is -0.5, and that the price of good X increases by 10%.We would expect the quantity demanded of good X to

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

Assume that the price elasticity of demand is -2 for a certain firm's product.If the firm raises price, the firm's managers can expect total revenue to:

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

A price elasticity of infinity corresponds to a demand curve that is:

A price elasticity of zero corresponds to a demand curve that is:

If the cross-price elasticity between ketchup and hamburgers is -1.2, a 4% increase in the price of ketchup will lead to a 4.8%:

The demand for good X has been estimated by Qxd = 6 - 2Px + 5Py.Suppose that good X sells at $3 per unit and good Y sells for $2 per unit.Calculate the own price elasticity.

Suppose the own-price elasticity of demand for good X is -5, and that the quantity of good X decreases by 5%.What would you expect to happen to the total expenditures on good X?

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

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 Q _x^d = 10,000 - 2 P_x + 3 P_y - 4.5M, where P_x = $100, P_y = $50, and M = $2,000.What is the own-price elasticity of demand?

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 goods x and y are:

The demand for good X has been estimated by Q_x^d = 6 - 2P_x + 5P_y.Suppose that good X sells at $3 per unit and good Y sells for $2 per unit.Calculate the own price elasticity.