Question 1

Suppose Qxd = 10,000 - 2 Px + 3 Py - 4.5M, where Px = $100, Py = $50, and M = $2,000. How much of good X is consumed?

Accepted Answer

A)  100 units 
B)  500 units 
C)  1,100 units 
D)  950 units 
A)  100 units 
B)  500 units 
C)  1,100 units 
D)  950 units

Question 2

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 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 DVD rentals. 
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 DVD rentals. 
D)  The advertising elasticity of demand for movie tickets is -0.33.

Question 3

When marginal revenue is zero, total revenue:

Accepted Answer

A)  will increase when price increases. 
B)  is maximized. 
C)  will decrease when price decreases. 
D)  will decrease as quantity decreases. 
A)  will increase when price increases. 
B)  is maximized. 
C)  will decrease when price decreases. 
D)  will decrease as quantity decreases.

Question 4

As a rule of thumb, a parameter estimate is statistically different from zero when the absolute value of the t-statistic is:

Accepted Answer

A)  zero. 
B)  less than one. 
C)  greater than or equal to 1. 
D)  greater than or equal to 2. 
A)  zero. 
B)  less than one. 
C)  greater than or equal to 1. 
D)  greater than or equal to 2.

Question 5

The statistical analysis of economic phenomena is defined as:

Accepted Answer

A)  econometrics. 
B)  variance. 
C)  confidence intervals. 
D)  standard deviation. 
A)  econometrics. 
B)  variance. 
C)  confidence intervals. 
D)  standard deviation.

Question 6

If the short-term own price elasticity for transportation is estimated to be -0.6, then long-term own price elasticity is expected to be:

Accepted Answer

A)  -0.6. 
B)  greater than -0.6. 
C)  less than -0.6. 
D)  neither greater than, less than, nor equal to -0.6. 
A)  -0.6. 
B)  greater than -0.6. 
C)  less than -0.6. 
D)  neither greater than, less than, nor equal to -0.6.

Question 7

When marginal revenue is negative for a linear (inverse) demand function, increases in output will cause total revenues to:

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  There is not sufficient information to answer the question. 
A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  There is not sufficient information to answer the question.

Question 8

The elasticity that measures the responsiveness of consumer demand to changes in income is the:

Accepted Answer

A)  income elasticity. 
B)  own price elasticity. 
C)  cross-price elasticity. 
D)  neither the income elasticity, the own price elasticity, nor the cross-price elasticity. 
A)  income elasticity. 
B)  own price elasticity. 
C)  cross-price elasticity. 
D)  neither the income elasticity, the own price elasticity, nor the cross-price elasticity.

Question 9

Determine the intercept coefficient (point E) and whether that estimate is statistically significant at the 5 percent level.

Accepted Answer

A)  1,664.46 and statistically significant since the P-value is less than 5 percent. 
B)  2.32 and statistically significant since the t-statistic is greater than 2 in absolute value. 
C)  1,664.46 and statistically insignificant since the P-value is less than 5 percent. 
D)  2.32 and statistically insignificant since the t-statistic is less than 2 in absolute value. 
A)  1,664.46 and statistically significant since the P-value is less than 5 percent. 
B)  2.32 and statistically significant since the t-statistic is greater than 2 in absolute value. 
C)  1,664.46 and statistically insignificant since the P-value is less than 5 percent. 
D)  2.32 and statistically insignificant since the t-statistic is less than 2 in absolute value.

Question 10

Your firm's research department has estimated the income elasticity of demand for Art Deco lawn furniture to be -0.85. You have just learned that due to an upturn in the economy, consumer incomes are expected to rise by 5 percent next year. How will this event affect your ordering decision for PVC pipe, which is the main component in your furniture?

Accepted Answer

Using the formula for the inco

Question 11

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 12

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 13

If the demand function for a particular good is Q = 20 - 8P, then demand at a price of $1 is:

Accepted Answer

A)  elastic. 
B)  unit elastic. 
C)  inelastic. 
D)  The elasticity cannot be determined. 
A)  elastic. 
B)  unit elastic. 
C)  inelastic. 
D)  The elasticity cannot be determined.

Question 14

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

Accepted Answer

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

Question 15

An income elasticity less than zero tells us that the good is:

Accepted Answer

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

Question 16

Determine the standard error of the estimated slope coefficient for the price of roses (point F) and whether that estimated slope coefficient is statistically significant at the 5 percent level.

Accepted Answer

A)  9.42 and statistically significant since the t-statistic is greater than 2 in absolute value. 
B)  9.42 and statistically insignificant since the t-statistic is less than 2 in absolute value. 
C)  4.74 and statistically insignificant since the P-value is greater than 5 percent. 
D)  4.74 and statistically significant since the P-value is greater than 5 percent. 
A)  9.42 and statistically significant since the t-statistic is greater than 2 in absolute value. 
B)  9.42 and statistically insignificant since the t-statistic is less than 2 in absolute value. 
C)  4.74 and statistically insignificant since the P-value is greater than 5 percent. 
D)  4.74 and statistically significant since the P-value is greater than 5 percent.

Question 17

Which of the following goods would you expect to have the most inelastic demand? Why?
a. Swiss cheese
b. Cheese
c. Dairy products

Accepted Answer

Dairy products are expected to have the

Question 18

The greater the standard error of an estimated coefficient:

Accepted Answer

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

Question 19

The statistical analysis of economic phenomena is defined as:

Accepted Answer

A)  standard error. 
B)  confidence intervals. 
C)  the t-statistic. 
D)  econometrics. 
A)  standard error. 
B)  confidence intervals. 
C)  the t-statistic. 
D)  econometrics.

Question 20

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 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 is 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 is correct.

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. How much of good X is consumed?

When marginal revenue is zero, total revenue:

As a rule of thumb, a parameter estimate is statistically different from zero when the absolute value of the t-statistic is:

The statistical analysis of economic phenomena is defined as:

If the short-term own price elasticity for transportation is estimated to be -0.6, then long-term own price elasticity is expected to be:

When marginal revenue is negative for a linear (inverse) demand function, increases in output will cause total revenues to:

The elasticity that measures the responsiveness of consumer demand to changes in income is the:

Determine the intercept coefficient (point E) and whether that estimate is statistically significant at the 5 percent level.

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?

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

If the demand function for a particular good is Q = 20 - 8P, then demand at a price of $1 is:

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

An income elasticity less than zero tells us that the good is:

Determine the standard error of the estimated slope coefficient for the price of roses (point F) and whether that estimated slope coefficient is statistically significant at the 5 percent level.

Which of the following goods would you expect to have the most inelastic demand? Why? a. Swiss cheese b. Cheese c. Dairy products

The greater the standard error of an estimated coefficient:

The statistical analysis of economic phenomena is defined as:

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 remained at $3 billion annually. This data indicates that:

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 Qxd = 10,000 - 2 Px + 3 Py - 4.5M, where Px = $100, Py = $50, and M = $2,000. How much of good X is consumed?

When marginal revenue is zero, total revenue:

As a rule of thumb, a parameter estimate is statistically different from zero when the absolute value of the t-statistic is:

The statistical analysis of economic phenomena is defined as:

If the short-term own price elasticity for transportation is estimated to be -0.6, then long-term own price elasticity is expected to be:

When marginal revenue is negative for a linear (inverse) demand function, increases in output will cause total revenues to:

The elasticity that measures the responsiveness of consumer demand to changes in income is the:

Determine the intercept coefficient (point E) and whether that estimate is statistically significant at the 5 percent level.

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?

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

If the demand function for a particular good is Q = 20 - 8P, then demand at a price of $1 is:

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

An income elasticity less than zero tells us that the good is:

Determine the standard error of the estimated slope coefficient for the price of roses (point F) and whether that estimated slope coefficient is statistically significant at the 5 percent level.

Which of the following goods would you expect to have the most inelastic demand? Why? a. Swiss cheese b. Cheese c. Dairy products

The greater the standard error of an estimated coefficient:

The statistical analysis of economic phenomena is defined as:

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 remained at $3 billion annually. This data indicates that:

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. How much of good X is consumed?