Exam 3: Quantitative Demand Analysis

Suppose the demand for sunscreen (X) has been estimated to be ln Q_x = 5 - 1.7 ln P_x + 3 ln S - 3 ln A_y, where S denotes the average hours of sunshine per day and A_y represents the level of advertising for good Y. a. What would be the impact on demand of a 5 percent increase in the daily amount of sunshine? b. What would be the impact of a 10 percent reduction in the amount of advertising toward good Y? c. What might be good Y in this example?

Since most consumers spend very little on salt, a small increase in the price of salt will:

When marginal revenue is zero, demand will be:

When a demand curve is linear,

The income elasticity of demand for your firm's product is estimated to be 0.75. A recent report in The Wall Street Journal says that national income is expected to decline by 3 percent this year. a. What should you do with your stock of inventories? b. What do you expect to happen to your sales? c. How would you answer parts a and b if you expected a 5 percent increase in income instead of a decrease?

Demand is perfectly elastic when the absolute value of the own price elasticity of demand is:

Suppose the demand for good x is ln Q_x^d = 21 - 0.8 ln P_x - 1.6 ln P_y + 6.2 ln M + 0.4 ln A_x. Then we know goods x and y are:

The lower the standard error:

Suppose the monthly demand for soda by a consumer is given by . a. If the price of soda is $1 per can, how many sodas will the consumer purchase in a typical month? b. What is the elasticity of demand for soda?

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 advertising elasticity of demand for good x?

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

Suppose the demand function is given by Q_x^d = 10P_x^0.9 P_y^0.5 M^0.22 H. Then the cross-price elasticity between goods x and y is:

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

The demand for good X is estimated to be Q_x^d = 10,000 - 4P_X + 5P_Y + 2M + A_X, where P_X is the price of X, P_Y is the price of good Y, M is income, and A_X is the amount of advertising on X. Suppose the present price of good X is $50, P_Y = $100, M = $25,000, and A_X = 1,000 units. Based on this information, goods X and Y are:

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

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

The demand for women's clothing is, in general:

The demand for food (a broad group) is more:

The demand for good X is estimated to be Q_x^d = 10,000 - 4P_X + 5P_Y + 2M + A_X where P_X is the price of X, P_Y is the price of good Y, M is income, and A_X is the amount of advertising on X. Suppose the present price of good X is $50, P_Y = $100, M = $25,000, and A_X = 1,000 units. What is the quantity demanded of good X?

The demand for good X has been estimated to be ln Q_x^d = 100 - 2.5 ln P_X + 4 ln P_Y + ln M. The cross-price elasticity of demand between goods X and Y is: