Exam 7: Demand Estimation and Forecasting

a.complements since the coefficient on M is positive. b.substitutes since the coefficient on M is positive. c.complements since the coefficient on is positive. d.substitutes since the coefficient on is positive. -The estimated demand for a good is where Q is the quantity demanded of the good,P is the price of the good,M is income,and is the price of related good R.This good and good R are

Build-Right Concrete Products produces specialty cement used in construction of highways.Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: where Q = yards of cement demanded monthly,P = the price of Build-Right's cement per yard,M = state tax revenues per capita,and = the price of asphalt per yard.The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation.The estimation results are presented below: Given the above,the estimated cross-price elasticity of demand for cement relative to the price of asphalt is

A consulting firm estimates the following quarterly sales forecasting model: The equation is estimated using quarterly data from 2005I-2015III t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise. The results of the estimation are: Given the above,what is the estimated intercept of the trend line in the second quarter?

A forecaster used the regression equation and quarterly sales data for 1996I-2013IV t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and and are dummy variables for quarters I,II,and III. At the 5 percent level of significance,is there a statistically significant trend in sales?

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and is the price of a related product.The results of the estimation are presented below: Given the above,at the 1% level of significance,which estimates are statistically significant?

If demand is estimated using the empirical specification ,then an equivalent expression for demand is

A consulting firm estimates the following quarterly sales forecasting model: The equation is estimated using quarterly data from 2005I-2015III t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise. The results of the estimation are: Given the above,these estimates indicate that the second quarter change in sales is

The manufacturer of Beanie Baby dolls used quarterly price data for 2005I - 2013IV t = 1,...,36)and the regression equation to forecast doll prices in the year 2014. is the quarterly price of dolls,and and are dummy variables for quarters I,II,and III,respectively. The estimated QUARTERLY increase in price is ______,and the estimated ANNUAL increase in price is ______ .

a.complements since the coefficient on M is positive. b.substitutes since the coefficient on M is positive. c.complements since the coefficient on is positive. d.substitutes since the coefficient on is positive. -estimated demand for a good is where Q is the quantity demanded of the good,P is the price of the good,M is income,and is the price of related good R.If the price of the good falls by $4,the quantity demanded will ________ by ________ units.

Problems in forecasting include:

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and is the price of a related product.The results of the estimation are presented below: For the next 2 questions suppose income remains at $10,000 but the price of the related good increases to $60 and Conlan decides to raise the price of its product to $50.What is the new own price elasticity of demand?

Dummy variables are used in time-series forecasting models

estimated demand for a good is where Q is the quantity demanded of the good,P is the price of the good,M is income,and is the price of related good R.This good and the related good R are

A consulting firm estimates the following quarterly sales forecasting model: The equation is estimated using quarterly data from 2005I-2015III t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise. The results of the estimation are: Given the above,what is the estimated intercept of the trend line in the third quarter?

A forecaster used the regression equation and quarterly sales data for 1996I-2013IV t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and and are dummy variables for quarters I,II,and III. Using the estimation results given above,the predicted level of sales in 2014II is _______ units.

The manufacturer of Beanie Baby dolls used quarterly price data for 2005I - 2013IV t = 1,...,36)and the regression equation to forecast doll prices in the year 2014. is the quarterly price of dolls,and and are dummy variables for quarters I,II,and III,respectively. What is the estimated intercept of the trend line in the 4th quarter?

A consulting firm estimates the following quarterly sales forecasting model: The equation is estimated using quarterly data from 2005I-2015III t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise. The results of the estimation are: Given the above,at the 1 percent level of significance,is there a statistically significant trend in sales?

Build-Right Concrete Products produces specialty cement used in construction of highways.Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: where Q = yards of cement demanded monthly,P = the price of Build-Right's cement per yard,M = state tax revenues per capita,and = the price of asphalt per yard.The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation.The estimation results are presented below: Given the above,if Build-Right decides to charge the State Highway Department $55 per yard for its cement when tax revenues per capita are $3,200 and the price of asphalt is $35 per yard,the expected quantity demanded is

problem with consumer interviews is that

A market-determined price