Question 1

Using Excel, Big Poppa's estimates the weekly demand function for its BBQ sandwiches to be Qd = 1,258.33 - (19.55 × P). In reference to the estimated slope coefficient for price , which of the following standard errors will provide the smallest 95 percent confidence interval for the slope coefficient?

Accepted Answer

A)  3
B)  1.25
C)  0.50
D)  0.95 C

Question 2

The price elasticity for corn from a particular farmer is likely to be________ .

Accepted Answer

A)  close to 0
B)  perfectly inelastic
C)  close to 1
D)  perfectly elastic D

Question 3

If Excel estimated the 95 percent confidence interval for a slope coefficient for the price  to run from - 25.50 to - 22.30, which of the following is true?

Accepted Answer

A)  You are 95 percent confident that in response to dollar increase in price, consumers will decrease the quantity demanded by an amount that lies between 22.30 and 25.50.
B)  You are 95 percent confident that in response to dollar increase in price, consumers will decrease the quantity demanded by an amount greater than 25.50.
C)  You are 95 percent confident that in response to dollar increase in price, consumers will decrease the quantity demanded by an amount greater than 22..30.
D)  You are 95 percent confident that in response to dollar increase in price, consumers will increase the quantity demanded by an amount that lies between 22.30 and 25.50. A

Question 4

If the cross- price elasticity between Goods X and Y is 2.0, the goods are and an increase in the price of Good X will cause a(n)_________in the quantity demanded of Good Y.

Accepted Answer

A)  substitutes; decrease
B)  substitutes; increase
C)  complements; decrease
D)  complements; increase

Question 5

You are the owner of a boutique clothing store and estimate the price elasticity of demand for your clothing to be 2.50 and the income elasticity of demand for your clothing to be 1.55. If you increase the price of your clothing by 10 percent, which of the following should you expect to occur?

Accepted Answer

A)  The quantity demanded of your clothing will increase by 25 percent.
B)  The quantity demanded of your clothing will increase by 15.5 percent.
C)  The quantity demanded of your clothing will decrease by 15.5 percent.
D)  The quantity demanded of your clothing will decrease by 25 percent.

Question 6

If a nonlinear regression equation provides a better fit to the actual data, but a straight- line regression is estimated, the estimated straight- line regression will have a greater R2 than the R2 from the nonlinear regression.

Accepted Answer

A) True 
 B)False

Question 7

If a scatter plot of the data points for the price and quantity demanded appear to have a convex (bowed inward)shape, estimating a log- linear demand curve will likely yield a R2 that is greater than the R2 from a straight- line demand curve.

Accepted Answer

A) True 
 B)False

Question 8

All of the following are true regarding the standard error of a coefficient except which one?

Accepted Answer

A)  A small standard error suggests that the estimated coefficient is likely to be close to the true value.
B)  A large standard error suggests that the estimated coefficient is likely to be close to the true value.
C)  The standard error reflects the fact that the estimated coefficients have random element.
D)  The standard error of a coefficient measures how much the estimated coefficient is likely to change if another set of data is used to reestimate the regression.

Question 9

If Excel estimates the demand function for a product to be: Qd = 1,500 - (5 × P)and the actual quantity demanded is 850 when a price of $125 is charged, the estimated residual is 25.

Accepted Answer

A) True 
 B)False

Question 10

If the price elasticity of demand for your product is 0.75 and you increase the price of the product, you should expect an increase in total revenue.

Accepted Answer

A) True 
 B)False

Question 11

For a linear demand curve, the point elasticity of demand will be greater at higher prices relative to lower prices.

Accepted Answer

A) True 
 B)False

Question 12

Because there will always be some random factors the affect demand that cannot be captured, a is ________added to the regression equation.

Accepted Answer

A)  dependent variable
B)  horizontal intercept
C)  random error term
D)  slope coefficient

Question 13

Using Excel, the manager of Quick Breaks Coffees has estimated the daily demand function for its regular coffees; the results are shown in the table above. Which of the following statements is correct?

Accepted Answer

A)  The predicted values from the regression account for 95 percent of the variation in the actual data.
B)  The predicted values from the regression account for 98 percent of the variation in the actual data.
C)  The estimated regression has a very poor fit to the data.
D)  The predicted values lie far from the actual values.

Question 14

If a 5 percent increase in consumer incomes leads to a 10 percent increase in the quantity demanded for a good, the good is a(n)_________ good with an income elasticity of________ .

Accepted Answer

A)  normal; 2.0
B)  inferior; - 0.50
C)  inferior ; 2.0
D)  normal; 0.50

Question 15

When reviewing reports based on a regression analysis, it is important to consider all of the following except which one?

Accepted Answer

A)  a scatter plot of the actual data
B)  the statistical software used to estimate the e regression
C)  other factors that affect the dependent variable, but were omitted from the regression
D)  the functional form of the estimated regression

Question 16

A linear demand curve is a constant elasticity of demand curve.

Accepted Answer

A) True 
 B)False

Question 17

If the R2 is large, you are confident in the regression results because the predicted values are ________ the actual values.

Accepted Answer

A)  more; far from
B)  less; close to
C)  more; close to
D)  less; far from

Question 18

The scatter diagram above shows the actual data for the price and quantity demanded of a product.
-Refer to the scatter diagram above. The scatter diagram suggests all of the following, except which one?

Accepted Answer

A)  The R2 is likely to be greater when an nonlinear demand curve is estimated compared to a straight- line demand curve.
B)  The estimated demand will have a negative slope.
C)  A straight- line demand curve is likely to be a better fit to the actual data compared to a nonlinear demand curve.
D)  The R2 is likely to be greater when a straight- line demand curve is estimated compared to a nonlinear demand curve.

Question 19

If the P- value for an estimated slope coefficient is 0.025, using 95 percent confidence, which of the following is true?

Accepted Answer

A)  Reject the alternative hypothesis that the true value of the slope coefficient equals zero.
B)  Fail to reject the null hypothesis that the true value of the slope coefficient equals zero.
C)  Fail to reject the alternative hypothesis that the true value of the slope coefficient equals zero.
D)  Reject the null hypothesis that the true value of the slope coefficient equals zero.

Question 20

A nonlinear demand curves have positive slope.

Accepted Answer

A) True 
 B)False

Exam 3: Measuring and Using Demand

The price elasticity for corn from a particular farmer is likely to be________ .

If Excel estimated the 95 percent confidence interval for a slope coefficient for the price to run from - 25.50 to - 22.30, which of the following is true?

If the cross- price elasticity between Goods X and Y is 2.0, the goods are and an increase in the price of Good X will cause a(n) _________in the quantity demanded of Good Y.

You are the owner of a boutique clothing store and estimate the price elasticity of demand for your clothing to be 2.50 and the income elasticity of demand for your clothing to be 1.55. If you increase the price of your clothing by 10 percent, which of the following should you expect to occur?

If a nonlinear regression equation provides a better fit to the actual data, but a straight- line regression is estimated, the estimated straight- line regression will have a greater R² than the R² from the nonlinear regression.

If a scatter plot of the data points for the price and quantity demanded appear to have a convex (bowed inward)shape, estimating a log- linear demand curve will likely yield a R² that is greater than the R² from a straight- line demand curve.

All of the following are true regarding the standard error of a coefficient except which one?

If Excel estimates the demand function for a product to be: Q^d = 1,500 - (5 × P)and the actual quantity demanded is 850 when a price of $125 is charged, the estimated residual is 25.

If the price elasticity of demand for your product is 0.75 and you increase the price of the product, you should expect an increase in total revenue.

For a linear demand curve, the point elasticity of demand will be greater at higher prices relative to lower prices.

Because there will always be some random factors the affect demand that cannot be captured, a is ________added to the regression equation.

Using Excel, the manager of Quick Breaks Coffees has estimated the daily demand function for its regular coffees; the results are shown in the table above. Which of the following statements is correct?

If a 5 percent increase in consumer incomes leads to a 10 percent increase in the quantity demanded for a good, the good is a(n) _ good with an income elasticity of .

When reviewing reports based on a regression analysis, it is important to consider all of the following except which one?

A linear demand curve is a constant elasticity of demand curve.

If the R2 is large, you are confident in the regression results because the predicted values are ________ the actual values.

The scatter diagram above shows the actual data for the price and quantity demanded of a product. -Refer to the scatter diagram above. The scatter diagram suggests all of the following, except which one?

If the P- value for an estimated slope coefficient is 0.025, using 95 percent confidence, which of the following is true?

A nonlinear demand curves have positive slope.

Exam 3: Measuring and Using Demand

The price elasticity for corn from a particular farmer is likely to be________ .

If Excel estimated the 95 percent confidence interval for a slope coefficient for the price to run from - 25.50 to - 22.30, which of the following is true?

If the cross- price elasticity between Goods X and Y is 2.0, the goods are and an increase in the price of Good X will cause a(n) _________in the quantity demanded of Good Y.

You are the owner of a boutique clothing store and estimate the price elasticity of demand for your clothing to be 2.50 and the income elasticity of demand for your clothing to be 1.55. If you increase the price of your clothing by 10 percent, which of the following should you expect to occur?

If a nonlinear regression equation provides a better fit to the actual data, but a straight- line regression is estimated, the estimated straight- line regression will have a greater R2 than the R2 from the nonlinear regression.

If a scatter plot of the data points for the price and quantity demanded appear to have a convex (bowed inward)shape, estimating a log- linear demand curve will likely yield a R2 that is greater than the R2 from a straight- line demand curve.

All of the following are true regarding the standard error of a coefficient except which one?

If Excel estimates the demand function for a product to be: Qd = 1,500 - (5 × P)and the actual quantity demanded is 850 when a price of $125 is charged, the estimated residual is 25.

If the price elasticity of demand for your product is 0.75 and you increase the price of the product, you should expect an increase in total revenue.

For a linear demand curve, the point elasticity of demand will be greater at higher prices relative to lower prices.

Because there will always be some random factors the affect demand that cannot be captured, a is ________added to the regression equation.

Using Excel, the manager of Quick Breaks Coffees has estimated the daily demand function for its regular coffees; the results are shown in the table above. Which of the following statements is correct?

If a 5 percent increase in consumer incomes leads to a 10 percent increase in the quantity demanded for a good, the good is a(n) _________ good with an income elasticity of________ .

When reviewing reports based on a regression analysis, it is important to consider all of the following except which one?

A linear demand curve is a constant elasticity of demand curve.

If the R2 is large, you are confident in the regression results because the predicted values are ________ the actual values.

The scatter diagram above shows the actual data for the price and quantity demanded of a product. -Refer to the scatter diagram above. The scatter diagram suggests all of the following, except which one?

If the P- value for an estimated slope coefficient is 0.025, using 95 percent confidence, which of the following is true?

A nonlinear demand curves have positive slope.

If a nonlinear regression equation provides a better fit to the actual data, but a straight- line regression is estimated, the estimated straight- line regression will have a greater R² than the R² from the nonlinear regression.

If a scatter plot of the data points for the price and quantity demanded appear to have a convex (bowed inward)shape, estimating a log- linear demand curve will likely yield a R² that is greater than the R² from a straight- line demand curve.

If Excel estimates the demand function for a product to be: Q^d = 1,500 - (5 × P)and the actual quantity demanded is 850 when a price of $125 is charged, the estimated residual is 25.

If a 5 percent increase in consumer incomes leads to a 10 percent increase in the quantity demanded for a good, the good is a(n) _ good with an income elasticity of .