question

If Dr. Pepper estimated the Cross Price Elasticity of Demand for its soda + 0.25, what does this tell us about how Dr. Pepper and Mr. Pibb are related?

answer

Substitutes

question

If Dr. Pepper estimated the Cross Price Elasticity of Demand for its soda, with respect to Mr. Pibb is + 0.25, if Mr. Pibb cuts its price by 30% what does this do to the Demand for Dr. Pepper in % Change terms?

answer

Change it by -7.5%

question

If Kia automobiles estimates the Income Elasticity of Demand for its cars is - 0.6 what does this tell us about how Demand for Kias are related to changes in Income?

answer

Kias are a normal good

question

If you have calculated the Income Elasticity of Demand for Oakley sunglasses is +1.4, then this means that..

answer

It is a Normal Good - every time income rises by 1%, Quantity Demanded of Oakleys rises by 1.4%

question

Looking at the Statements below -- which 2 of them are correct in terms of our evaluation of Regression Analysis?

answer

When we are using Regressions -- we are trying to model Truth (a true relationship), but the estimations are Not Truth themselves (they are just our best guess with the available data)

More Observations --> Improves the Quality and Reliability of Estimations

More Observations --> Improves the Quality and Reliability of Estimations

question

We suggested that in order to have any confidence in a regression producing a reliable estimate it needed.....

answer

to have at least 30 observations

question

When looking at the t-stat for an estimated coefficient in a regression, a rough guide to the this being a reliable estimated coefficient is that...

answer

the absolute value of the t-stat > 2

question

Economists often like to use a Log-Linear form of regression estimation because...

answer

the estimated Coefficients of the Variables are the Variables's Elasticities

question

The Short-Run in Economics is...

answer

time frame when there are Fixed Factors of Production

question

Productivity is calculated as...

answer

Average Product

question

When Comparing Marginal Productivity Values to Average Productivity Values:

answer

When Marginal Product is Greater than Average Product

Average Product Rises

When Marginal Product is Less than Average Product

Average Product Falls

When Marginal Product is equal to Average Product

Average Product is at a Maximum

Average Product Rises

When Marginal Product is Less than Average Product

Average Product Falls

When Marginal Product is equal to Average Product

Average Product is at a Maximum

question

If a Firm's Total Costs (TC) can be given by the following equation:

TC = 8,000 + 50Q + 10Q2

What is the Firm's Average Total cost function

TC = 8,000 + 50Q + 10Q2

What is the Firm's Average Total cost function

answer

ATC = 8000/Q + 50 + 10Q

question

If a Firm's Total Costs (TC) can be given by the following equation:

TC = 8,000 + 50Q + 10Q2

What is the Firm's Marginal cost (MC) function?

TC = 8,000 + 50Q + 10Q2

What is the Firm's Marginal cost (MC) function?

answer

MC = 50 + 20Q

question

If a firm increases its production and its Average Costs rise then....

answer

It has Diseconomies of Scale

question

Mark all of the Answers below that are key implications for firms in the Competitive Market Structure:

answer

Entry and exit forces Long-Run Profits to Zero.

In the Short-Run, firms may earn Profits or Losses.

Firms are "Price Takers" (P = MR).

In the Short-Run, firms may earn Profits or Losses.

Firms are "Price Takers" (P = MR).

question

A Competive Firm's Short-Run Supply curve is..........

answer

Their Marginal Cost Curve above Minimum Average Variable Cost

question

If you are told that for a typical firm in a Perfectly Competitive Market the Market Price is $50, they sell 100 units a day, and the $ value of their Minimum Average Total Cost is $40 then which of the following statements is correct?

answer

$50 is not a Long-Run Equilibrium Price for this Market -- New Firms will enter until the Market Price = $40

question

Mark all of the answers below that are Characteristics of Monopoly.

answer

Single Seller

Barriers to Entry

Product with no close Substitutes

Barriers to Entry

Product with no close Substitutes

question

Mark all of the answers below that are sources of Monopoly power (Barriers to entry).

answer

Patents

Ownership of Key Natural Resource

Economies of Scale

Ownership of Key Natural Resource

Economies of Scale