Question 1

The residual sum of squares and degrees of freedom due to the regression are:

Accepted Answer

A)  44,539.54 and 2, respectively. 
B)  747,851.57, and 98, respectively. 
C)  1,540,242.68 and 48, respectively. 
D)  There is not sufficient information to answer this question. 
A)  44,539.54 and 2, respectively. 
B)  747,851.57, and 98, respectively. 
C)  1,540,242.68 and 48, respectively. 
D)  There is not sufficient information to answer this question.

Question 2

The short-run response of quantity demanded to a change in price is usually:

Accepted Answer

A)  the same as the long-run response. 
B)  less than the long-run response. 
C)  greater than the long-run response. 
D)  None of the statements is correct. 
A)  the same as the long-run response. 
B)  less than the long-run response. 
C)  greater than the long-run response. 
D)  None of the statements is correct.

Question 3

If the short-term own price elasticity for food is estimated to be -0.4, then long-term own price elasticity is expected to be:

Accepted Answer

A)  -0.4. 
B)  greater than -0.4. 
C)  less than -0.4. 
D)  neither greater than, less than, nor equal to -0.4. 
A)  -0.4. 
B)  greater than -0.4. 
C)  less than -0.4. 
D)  neither greater than, less than, nor equal to -0.4.

Question 4

The elasticity of demand for gasoline has been estimated to be 2.0, and the standard error is 1.0. The upper and lower bounds on the 95 percent confidence interval for the elasticity of demand for gasoline are:

Accepted Answer

A)  3 and 2. 
B)  2 and 1. 
C)  3 and 1. 
D)  None of the statements is correct. 
A)  3 and 2. 
B)  2 and 1. 
C)  3 and 1. 
D)  None of the statements is correct.

Question 5

If the income elasticity for lobster is 0.4, a 40 percent increase in income will lead to a:

Accepted Answer

A)  10 percent drop in demand for lobster. 
B)  16 percent increase in demand for lobster. 
C)  20 percent increase in demand for lobster. 
D)  4 percent increase in demand for lobster. 
A)  10 percent drop in demand for lobster. 
B)  16 percent increase in demand for lobster. 
C)  20 percent increase in demand for lobster. 
D)  4 percent increase in demand for lobster.

Question 6

If the income elasticity for lobster is 0.6, a 25 percent increase in income will lead to a:

Accepted Answer

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

Question 7

Determine the t-statistic of the estimated slope coefficient for disposable income (point G) and whether that estimated slope coefficient is statistically significant at the 5 percent level.

Accepted Answer

A)  3.31 and statistically significant since the t-statistic is greater than 2 in absolute value. 
B)  0.03 and statistically insignificant since the t-statistic is less than 2 in absolute value. 
C)  3.31 and statistically insignificant since the P-value is less than 5 percent. 
D)  28.62 and statistically significant since the P-value is less than 5 percent. 
A)  3.31 and statistically significant since the t-statistic is greater than 2 in absolute value. 
B)  0.03 and statistically insignificant since the t-statistic is less than 2 in absolute value. 
C)  3.31 and statistically insignificant since the P-value is less than 5 percent. 
D)  28.62 and statistically significant since the P-value is less than 5 percent.

Question 8

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

Accepted Answer

A)  fall by 3.5 percent. 
B)  rise by 3.5 percent. 
C)  fall by 35 percent. 
D)  rise by 35 percent. 
A)  fall by 3.5 percent. 
B)  rise by 3.5 percent. 
C)  fall by 35 percent. 
D)  rise by 35 percent.

Question 9

The demand function in Table 3-1 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 10

Use the regression output to compute the R-square and adjusted R-square (points A and B, respectively).

Accepted Answer

A)  0.056 and 0.017 
B)  0.944 and 0.942 
C)  0.944 and -0.428 
D)  0.06 and 0.02 
A)  0.056 and 0.017 
B)  0.944 and 0.942 
C)  0.944 and -0.428 
D)  0.06 and 0.02

Question 11

The demand for video recorders has been estimated to be linear and given by the demand relation Qv = 145 - 3.2Pv + 7M - 0.95Pf - 39Pm, 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 M is income. Based on the estimated demand equation we can conclude:

Accepted Answer

A)  video recorders are normal goods. 
B)  the demand for video recorders is inelastic. 
C)  video recorders are normal goods and the demand for video recorders is inelastic. 
D)  video recorders are normal goods and video recorder film is a complement for video recorders. 
A)  video recorders are normal goods. 
B)  the demand for video recorders is inelastic. 
C)  video recorders are normal goods and the demand for video recorders is inelastic. 
D)  video recorders are normal goods and video recorder film is a complement for video recorders.

Question 12

For a given set of data and a regression equation, the greater the R-square:

Accepted Answer

A)  the greater the t-value. 
B)  the lower the t-value. 
C)  the greater the adjusted R-square. 
D)  the lower the adjusted R-square. 
A)  the greater the t-value. 
B)  the lower the t-value. 
C)  the greater the adjusted R-square. 
D)  the lower the adjusted R-square.

Question 13

The management of Local Cinema has estimated the monthly demand for tickets to be ln Q = 22,328 - 0.41 ln P + 0.5 ln M - 0.33 ln A + 100 ln PDVD, where Q = quantity of tickets demanded, P = price per ticket, M = income, A = advertising outlay, and PDVD = price of a DVD rental. It is known that P = $5.50, M = $9,000, A = $900, and PDVD = $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 14

Your firm's research department has estimated the elasticity of demand for toys to be -0.7. As the manager of a local chain of toy stores, determine the impact of an 8 percent increase in toy prices on your total revenues.

Accepted Answer

Since the elasticity of demand

Question 15

When the price of sugar was "low," U.S. consumers spent a total of $3 billion annually on sugar consumption. When the price doubled, consumer expenditures increased to $5 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)  the demand curve for sugar is upward sloping and the quantity demanded of sugar increased. 
A)  the demand for sugar is inelastic. 
B)  the demand curve for sugar is upward sloping. 
C)  the quantity demanded of sugar increased. 
D)  the demand curve for sugar is upward sloping and the quantity demanded of sugar increased.

Question 16

A study has estimated the effect of changes in interest rates and consumer confidence on the demand for money to be: ln M = 14.666 + .021 ln C - 0.036 ln r, 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 17

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 corresponding R2 is:

Accepted Answer

A)  0.776. 
B)  0.224. 
C)  0.345. 
D)  0.671. 
A)  0.776. 
B)  0.224. 
C)  0.345. 
D)  0.671.

Question 18

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.

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

Suppose that at the equilibrium price and quantity, the marginal revenue is -$15 and the price elasticity of demand for a linear demand function is -0.75. Then we know that the equilibrium price is:

Accepted Answer

A)  -$5. 
B)  $45. 
C)  -$45. 
D)  $5. 
A)  -$5. 
B)  $45. 
C)  -$45. 
D)  $5.

The residual sum of squares and degrees of freedom due to the regression are:

The short-run response of quantity demanded to a change in price is usually:

If the short-term own price elasticity for food is estimated to be -0.4, then long-term own price elasticity is expected to be:

The elasticity of demand for gasoline has been estimated to be 2.0, and the standard error is 1.0. The upper and lower bounds on the 95 percent confidence interval for the elasticity of demand for gasoline are:

If the income elasticity for lobster is 0.4, a 40 percent increase in income will lead to a:

If the income elasticity for lobster is 0.6, a 25 percent increase in income will lead to a:

Determine the t-statistic of the estimated slope coefficient for disposable income (point G) and whether that estimated slope coefficient is statistically significant at the 5 percent level.

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

The demand function in Table 3-1 is Q_X^d = 100 - 2P_X. Based on this information, compute the total revenue when Q_X = 20 (point D).

Use the regression output to compute the R-square and adjusted R-square (points A and B, respectively).

For a given set of data and a regression equation, the greater the R-square:

Your firm's research department has estimated the elasticity of demand for toys to be -0.7. As the manager of a local chain of toy stores, determine the impact of an 8 percent increase in toy prices on your total revenues.

When the price of sugar was "low," U.S. consumers spent a total of $3 billion annually on sugar consumption. When the price doubled, consumer expenditures increased to $5 billion annually. This data indicates that:

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 corresponding R² is:

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

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

Suppose that at the equilibrium price and quantity, the marginal revenue is -$15 and the price elasticity of demand for a linear demand function is -0.75. Then we know that the equilibrium price 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

The residual sum of squares and degrees of freedom due to the regression are:

The short-run response of quantity demanded to a change in price is usually:

If the short-term own price elasticity for food is estimated to be -0.4, then long-term own price elasticity is expected to be:

The elasticity of demand for gasoline has been estimated to be 2.0, and the standard error is 1.0. The upper and lower bounds on the 95 percent confidence interval for the elasticity of demand for gasoline are:

If the income elasticity for lobster is 0.4, a 40 percent increase in income will lead to a:

If the income elasticity for lobster is 0.6, a 25 percent increase in income will lead to a:

Determine the t-statistic of the estimated slope coefficient for disposable income (point G) and whether that estimated slope coefficient is statistically significant at the 5 percent level.

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

The demand function in Table 3-1 is QXd = 100 - 2PX. Based on this information, compute the total revenue when QX = 20 (point D).

Use the regression output to compute the R-square and adjusted R-square (points A and B, respectively).

For a given set of data and a regression equation, the greater the R-square:

Your firm's research department has estimated the elasticity of demand for toys to be -0.7. As the manager of a local chain of toy stores, determine the impact of an 8 percent increase in toy prices on your total revenues.

When the price of sugar was "low," U.S. consumers spent a total of $3 billion annually on sugar consumption. When the price doubled, consumer expenditures increased to $5 billion annually. This data indicates that:

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 corresponding R2 is:

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

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

Suppose that at the equilibrium price and quantity, the marginal revenue is -$15 and the price elasticity of demand for a linear demand function is -0.75. Then we know that the equilibrium price 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

The demand function in Table 3-1 is Q_X^d = 100 - 2P_X. Based on this information, compute the total revenue when Q_X = 20 (point D).

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 corresponding R² is: