question

Assume that the price elasticity of demand is -2 for a certain firm's product. If the firm raises price, the firm's managers can expect total revenue to: A.decrease.B. increase.C. remain constant.D. either increase or remain constant, depending upon the size of the price increase.

answer

A.decrease.

question

A price elasticity of zero corresponds to a demand curve that is: A. horizontal.B. downward sloping with a slope always equal to 1.C.vertical.D. either vertical or horizontal.

answer

vertical

question

As we move down along a linear demand curve, the price elasticity of demand becomes more: A. elastic.B.inelastic.C. log-linear.D. variable.

answer

inelastic

question

If the demand for a product is Qxd = 10 - ln Px, then product x is: A. elastic.B. inelastic.C.unitary elastic.D. Cannot be determined without more information.

answer

unitary elastic

question

The demand for good X has been estimated by Qxd = 12 - 3Px + 4Py. Suppose that good X sells at $2 per unit and good Y sells for $1 per unit. Calculate the own price elasticity.

A. -0.2

B. -0.3

C. -0.5

D.-0.6

A. -0.2

B. -0.3

C. -0.5

D.-0.6

answer

-0.6

question

The own price elasticity of demand for apples is -1.2. If the price of apples falls by 5 percent, what will happen to the quantity of apples demanded?

A. It will increase 5 percent

.B. It will fall 4.3 percent.

C. It will increase 4.2 percent.

D.It will increase 6 percent.

A. It will increase 5 percent

.B. It will fall 4.3 percent.

C. It will increase 4.2 percent.

D.It will increase 6 percent.

answer

It will increase 6%

question

If apples have an own price elasticity of -1.2 we know the demand is:

A. unitary.

B. indeterminate.

C.elastic.

D. inelastic.

A. unitary.

B. indeterminate.

C.elastic.

D. inelastic.

answer

elastic

question

If quantity demanded for sneakers falls by 10 percent when price increases 25 percent, we know that the absolute value of the own price elasticity of sneakers is:

A. 2.5.

B.0.4.

C. 2.0.

D. 0.27.

A. 2.5.

B.0.4.

C. 2.0.

D. 0.27.

answer

0.4

question

The quantity consumed of a good is relatively unresponsive to changes in price whenever demand is:

A. elastic.B. unitary.C. falling.D.inelastic.

A. elastic.B. unitary.C. falling.D.inelastic.

answer

inelastic

question

If the absolute value of the own price elasticity of steak is 0.4, a decrease in price will lead to:

A.a reduction in total revenue.B.

an increase in total revenue.C

. no change in total revenue.D.

None of the statements is correct.

A.a reduction in total revenue.B.

an increase in total revenue.C

. no change in total revenue.D.

None of the statements is correct.

answer

a reduction in total revenue

question

If a price increase from $5 to $7 causes quantity demanded to fall from 150 to 100, what is the absolute value of the own price elasticity at a price of $7?

A. 0.57 B.1.75 C. 0.02 D. 1.24

A. 0.57 B.1.75 C. 0.02 D. 1.24

answer

1.75

question

Demand is perfectly elastic when the absolute value of the own price elasticity of demand is: A. zero.B. one.C.infinite.D. unknown.

answer

infinite

question

Demand is perfectly elastic when the absolute value of the own price elasticity of demand is: A. zero.B. one.C.infinite.D. unknown.

answer

infinite

question

The demand curve for a good is horizontal when it is: A. a perfectly inelastic good.B. a unitary elastic good.C.a perfectly elastic good.D. an inferior good.

answer

a perfectly elastic good

question

Suppose Qxd = 10,000 - 2 Px + 3 Py - 4.5M, where Px = $100, Py = $50, and M = $2,000. What is the own price elasticity of demand? A. -2.34B. -0.78C.-0.21D. -1.21

answer

-0.21

question

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? A. 100 unitsB. 500 unitsC. 1,100 unitsD.950 units

answer

950 units

question

Topic: Obtaining Elasticities From Demand Functions17.Which of the following factors would NOT affect the own price elasticity of a good? A. TimeB.Price of an inputC. Available substitutesD. Expenditure share

answer

price of an input

question

Suppose Qxd = 10,000 - 2 Px + 3 Py - 4.5M, where Px = $100, Py = $50, and M = $2,000. Then good X has a demand which is: A. elastic.B.inelastic.C. unitary.D. neither elastic, inelastic, nor unitary elastic.

answer

inelastic

question

We would expect the demand for jeans to be: A.more elastic than the demand for clothing.B. less elastic than the demand for clothing.C. the same as the demand for clothing.D. neither more elastic, less elastic, nor the same elasticity as that of the demand for clothing.

answer

more elastic than the demand for clothing

question

Demand is more inelastic in the short term because consumers: A. are impatient.B.have no time to find available substitutes.C. are present-oriented.D. None of the statements is correct

answer

have no time to find available substitutes

question

We would expect the own price elasticity of demand for food to be: A.less elastic than the demand for cereal.B. more elastic than the demand for cereal.C. the same as that for soap.D. perfectly inelastic.

answer

less elastic than the demand for cereal

question

The elasticity which shows the responsiveness of the demand for a good due to changes in the price of a related good is the: A. own price elasticity.B. income elasticity.C. log-linear elasticity.D.cross-price elasticity.

answer

cross price elasticity

question

If the cross-price elasticity between goods A and B is negative, we know the goods are: A. inferior goods.B.complements.C. inelastic.D. substitutes.

answer

complements

question

If the cross-price elasticity between ketchup and hamburgers is -1.2, a 4 percent increase in the price of ketchup will lead to a 4.8 percent: A. drop in quantity demanded of ketchup.B.drop in quantity demanded of hamburgers.C. increase in quantity demanded of ketchup.D. increase in quantity demanded of hamburgers.

answer

drop in quantity demanded of hamburgers

question

If the price of pork chops falls from $8 to $6, and this leads to an increase in demand for apple sauce from 100 to 140 jars, what is the cross-price elasticity of apple sauce and pork chops at a pork chop price of $6? A. -1.17B. 2.71C. 0.42D.-0.86

answer

-0.86

question

Suppose the demand function is Qxd = 100 - 8Px + 6Py - M. If Px = $4, Py = $2, and M = $10, what is the cross-price elasticity of good x with respect to the price of good y? A.0.17B. 0.38C. 0.21D. 0.04

answer

0.17

question

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

answer

income elasticity

question

An income elasticity less than zero tells us that the good is: A. a normal good.B. a Giffen good.C.an inferior good.D. an inelastic good.

answer

an inferior good

question

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

answer

16% increase in demand of lobster

question

You are the manager of a supermarket, and you know that the income elasticity of peanut butter is exactly -0.7. Due to the economic recession, you expect incomes to drop by 15 percent next year. How should you adjust your purchase of peanut butter? A.Buy 10.5 percent more peanut butter.B. Buy 2.14 percent more peanut butter.C. Buy 6.2 percent less peanut butter.D. Buy 9.8 percent less peanut butter.

answer

buy 10.5 percent more peanut butter

question

Suppose demand is given by Qxd = 50 - 4Px + 6Py + Ax, where Px = $4, Py = $2, and Ax = $50. What is the advertising elasticity of demand for good x? A. 1.12B. 0.38C. 1.92D.0.52

answer

0.52

question

Suppose demand is given by Qxd = 50 - 4Px + 6Py + Ax, where Px = $4, Py = $2, and Ax = $50. What is the quantity demanded of good x? A.96B. 50C. 46D. 72

answer

96

question

You are the manager of a popular shoe company. You know that the advertising elasticity of demand for your product is 0.15. How much will you have to increase advertising in order to increase demand by 10 percent? A. 0.02 percentB. 38.6 percentC.66.7 percentD. 4.3 percent

answer

66.7%

question

Suppose the demand for good x is ln Qxd = 21 - 0.8 ln Px - 1.6 ln Py + 6.2 ln M + 0.4 ln Ax. Then we know goods x and y are: A. substitutes.B.complements.C. normal goods.D. inferior goods.

answer

complements

question

Suppose the demand for good x is ln Qxd = 21 - 0.8 ln Px - 1.6 ln Py + 6.2 ln M + 0.4 ln Ax. Then we know good x is: A. an inferior good.B. an elastic good.C.a normal good.D. a Giffen good.

answer

a normal good

question

Suppose the demand for good x is ln Qxd = 21 - 0.8 ln Px - 1.6 ln Py + 6.2 ln M + 0.4 ln Ax. Then we know that the own price elasticity for good x is: A. unitary.B. elastic.C.inelastic.D. It cannot be calculated from the existing information.

answer

inelastic

question

Suppose the demand function is given by Qxd = 8Px0.5 Py0.25 M0.12 H. Then the cross-price elasticity between goods x and y is: A. 4.00.B.0.25.C. 0.50.D. 8.33.

answer

0.25

question

Suppose the demand function is given by Qxd = 8Px0.5 Py0.25 M0.12 H. Then good x is: A.a normal good.B. an inferior good.C. a complement for good y.D. perfectly inelastic.

answer

a normal good

question

Suppose the demand function is given by Qxd = 8Px0.5 Py0.25 M0.12 H. Then the demand for good x is: A.inelastic.B. unitary.C. elastic.D. perfectly elastic.

answer

inelastic

question

The statistical analysis of economic phenomena is defined as: A.econometrics.B. variance.C. confidence intervals.D. standard deviation.

answer

econometrics

question

The demand for video recorders has been estimated to be Qv = 134 - 1.07Pf + 46Pm - 2.1Pv - 5I, 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 I is income. Based on the estimated demand equation we can conclude: A.video recorders are inferior goods.B. video recorder film is a substitute for video recorders.C. the demand for video recorders is inelastic.D. the demand for video recorders is neither inferior nor inelastic, and video recorder film is not a substitute for video recorders.

answer

video recorders are inferior goods

question

Which of the following is used to determine the statistical significance of a regression coefficient? A.t-statisticB. F-statisticC. R-squareD. Adjusted R-square

answer

t-statistic

question

Which of the following provides a measure of the overall fit of a regression? A. t-statisticB. F-statisticC. R-squareD.The F-statistic and R-square

answer

the f statistic and r-square

question

Which of the following can be used to quantify the overall statistical significance of a regression? A. t-statisticB.F-statisticC. R-squareD. The F-statistic and R-square

answer

f statistic

question

Which of the following measures of fit penalizes a researcher for estimating many coefficients with relatively little data? A. t-statisticB. R-squareC.Adjusted R-squareD. Neither the t-statistic, the R-square, nor the adjusted R-square

answer

adjusted r sqauare

question

As a rule of thumb, a parameter estimate is statistically different from zero when the absolute value of the t-statistic is: A. zero.B. less than one.C. greater than or equal to 1.D.greater than or equal to 2.

answer

greater than or equal to 2

question

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: A. unitary.B. zero.C. very elastic.D.very inelastic.

answer

very inelastic

question

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, a 5 percent increase in interest rates will cause the demand for money to: A. drop by 1.8 percent.B. increase by 1.8 percent.C.drop by 0.18 percent.D. increase by 0.18 percent.

answer

drop by 0.18 %

question

The elasticity of variable G with respect to variable S is defined as: A.the percentage change in variable G that results from a given percentage change in variable S.B. the percentage change in variable G that results from a given change in variable S.C. the change in variable G that results from a given percentage change in variable S.D. the change in variable G that results from a given change in variable S.

answer

A. the percentage change in variable g that results from a given percentage change in variable S

question

If the absolute value of the own price elasticity of demand is greater than 1, then demand is said to be: A.elastic.B. inelastic.C. unitary elastic.D. neither elastic, inelastic, nor unitary elastic

answer

A. elastic

question

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

answer

decrease by 5%

question

Suppose the own price elasticity of demand for good X is -0.5, and the price of good X increases by 10 percent. What would you expect to happen to the total expenditures on good X? A.IncreaseB. DecreaseC. Remain unchangedD. Neither increase, decrease, nor remain unchanged

answer

increase

question

If the own price elasticity of demand is infinite in absolute value, then: A. demand is perfectly inelastic.B.the demand curve is horizontal.C. consumers do not respond at all to changes in price.D. demand is neither perfectly inelastic nor is the demand curve horizontal.

answer

the demand curve is horizontal

question

If demand is perfectly inelastic, then: A. the own price elasticity of demand is infinite in absolute value.B. a small increase in price will lead to a situation where none of the good is purchased.C.the demand curve is vertical.D. None of the statements is correct.

answer

the demand curve is vertical

question

The demand for good X is estimated to be Qxd = 10,000 - 4PX + 5PY + 2M + AX where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. What is the demand curve for good X? A. 61,500B. 61,300C. 61,300 - 4PXD.61,500 - 4PX

answer

61,500-4Px

question

The demand for good X is estimated to be Qxd = 10,000 - 4PX + 5PY + 2M + AX where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. What is the quantity demanded of good X? A. 61,500B.61,300C. 61,300 - 4PXD. 61,500 - 4PX

answer

61,300

question

The demand for good X is estimated to be Qxd = 10,000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. What is the own price elasticity of demand for good X? A.-0.003B. -0.03C. -0.3D. -3

answer

-0.003

question

The demand for good X is estimated to be Qxd = 10, 000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, we know that the demand for good X is: A. elastic.B.inelastic.C. unitary elastic.D. neither elastic, inelastic, nor unitary elastic.

answer

inelastic

question

The demand for good X is estimated to be Qxd = 10, 000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, the cross-price elasticity between goods X and Y is: A.0.008.B. -0.08.C. -0.8.D. -8.

answer

0.008

question

The demand for good X is estimated to be Qxd = 10,000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, goods X and Y are: A.substitutes.B. complements.C. normal goods.D. inferior goods.

answer

substitutes

question

The demand for good X is estimated to be Qxd = 10, 000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, the income elasticity of good X is: A. 0.008.B. 0.082.C.0.82.D. 8.2.

answer

0.82

question

The demand for good X is estimated to be Qxd = 10, 000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, good X is: A. an inferior good.B.a normal good.C. a Giffen good.D. a regular good

answer

a normal good

question

When a demand curve is linear, A. the elasticity is the same as the slope of the demand curve.B.demand is elastic at high prices.C. demand is unitary elastic at low prices.D. the elasticity is constant at all prices.

answer

demand is elastic at high prices

question

Which of the following is NOT an important factor that affects the magnitude of the own price elasticity of a good? A. Available substitutesB.Supply of the goodC. TimeD. Expenditure share

answer

supply of the good

question

If there are few close substitutes for a good, demand tends to be relatively: A. elastic.B.inelastic.C. unitary elastic.D. neither elastic, inelastic, nor unitary elastic.

answer

inelastic

question

The demand for food (a broad group) is more: A. elastic than the demand for beef (specific commodity).B.inelastic than the demand for beef (specific commodity).C. sensitive to price changes than the demand for beef.D. responsive to price changes than the demand for beef.

answer

inelastic than the demand for beef (specific commodity)

question

The demand for women's clothing is, in general: A.more elastic than the demand for clothing.B. less elastic than the demand for clothing.C. equally elastic to the demand for clothing.D. neither more elastic, less elastic, nor equally elastic to the demand for clothing.

answer

more elastic than the demand for clothing

question

Demand tends to be: A. more elastic in the short term than in the long term.B.more inelastic in the short term than in the long term.C. equally elastic in the short term and in the long term.D. None of the statements is correct.

answer

more inelastic in the short term than in the long term.

question

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

answer

less than -0.6

question

Since most consumers spend very little on salt, a small increase in the price of salt will: A. reduce quantity demanded by a large amount.B.not reduce quantity demanded by very much.C. not change quantity demanded.D. increase quantity demanded by a small amount.

answer

not reduce the quantity demanded by very much

question

Suppose the income elasticity for transportation is 1.8. Which of the following is an INCORRECT statement? A. Transportation is a normal good.B. Expenditures on transportation grow more rapidly than income grows.C.Expenditures on transportation will fall less rapidly than income falls.D. Whenever the income increases by 1 percent, the expenditure on transportation increases by 1.8 percent.

answer

C.Expenditures on transportation will fall less rapidly than income falls

question

Non-fed ground beef is an inferior good. In economic booms, grocery managers should: A. increase their orders of non-fed ground beef.B.reduce their orders of non-fed ground beef.C. not change their orders of non-fed ground beef.D. neither increase, reduce, nor maintain their current orders for non-fed ground beef.

answer

reduce their orders of non-fed ground beef.

question

The demand for good X has been estimated to be ln Qxd = 100 - 2.5 ln PX + 4 ln PY + ln M. The own price elasticity of good X is: A.-2.5.B. 4.0.C. -2.5 percent.D. 4.0 percent.

answer

-0.25

question

The demand for good X has been estimated to be ln Qxd = 100 - 2.5 ln PX + 4 ln PY + ln M. The cross-price elasticity of demand between goods X and Y is: A. -2.5.B.4.0.C. -2.5 percent.D. 4.0 percent.

answer

4.0

question

The demand for good X has been estimated to be ln Qxd = 100 - 2.5 ln PX + 4 ln PY + ln M. The income elasticity of good X is: A. 4.0.B.1.0.C. 2.0.D. -2.5.

answer

1.0

question

The demand for good X has been estimated to be ln Qxd = 100 - 2.5 ln PX + 4 ln PY + ln M. The advertising elasticity of good X is: A. 4.0.B. 1.0.C.0.0.D. -2.5.

answer

0.0

question

The greater the standard error of an estimated coefficient: 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.

answer

the lower the t-value of the estimated coefficient

question

For a given set of data and a regression equation, the greater the 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.

answer

the greater the adjusted R-square.

question

The lower the standard error: A. the less confident the manager can be that the parameter estimates reflect the true values.B.the more confident the manager can be that the parameter estimates reflect the true values.C. the more precisely the parameter estimates the true values.D. the less precisely the parameter estimates the true values.

answer

the more confident the manager can be that the parameter estimates reflect the true values.

question

The manager can be 95 percent confident that the true value of the underlying parameters in a regression is not zero if the absolute value of the t-statistic is: A. less than 1.B. less than 2.C. greater than 1.D.greater than 2.

answer

greater than 2

question

When the own price elasticity of good X is -3.5, then total revenue can be increased by: A. increasing the price.B. decreasing the quantity supplied.C.decreasing the price.D. neither increasing the price, decreasing the price, nor decreasing the quantity supplied.

answer

decreasing the price

question

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: 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.

answer

the demand of sugar is inelastic

question

Which of the following statements is INCORRECT? A. If a firm decreases the price of its product, its total revenue must decrease.B. The own price elasticity of demand is constant at all points along a linear demand curve.C. As the price of X falls and we move down an individual's demand curve for X, the money income of the individual also changes.D.None of the statements is correct.

answer

none of the statements is correct

question

The demand for which of the following commodities is likely to be most inelastic? A. Soft drinksB.BeveragesC. Cola drinksD. Pepsi ColaAACSB: Reflective Thinking

answer

beverages

question

Each week Bill buys exactly 7 bottles of cola regardless of its price. Bill's own price elasticity of demand for cola IN ABSOLUTE VALUE is: A. greater than 1.B. less than 1.C. 1.D.zero.

answer

zero

question

The price elasticity of demand is -2.0 for a certain firm's product. If the firm raises price, the firm manager can expect total revenue to: A.decrease.B. increase.C. remain constant.D. either increase or remain constant, depending upon the size of the price increase.

answer

decrease

question

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. A. -0.29B. -0.32C. -0.39D.-0.41

answer

-0.41

question

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? 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.

answer

movies are complements for dvd rentals

question

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: 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.

answer

none of the statements is correct.

question

The demand for good X is given by ln Qxd = 120 - 0.9 ln Px + 1.5 ln Py - 0.7 ln M. Which of the following statements is correct? A.X has constant income elasticity.B. An economic downturn will decrease demand for X.C. A 15 percent increase in income would increase demand for X by 10.5 percent.D. X has a constant income elasticity, and an economic downturn will decrease the demand for X.

answer

x has constant income elasticity

question

The cross-price elasticity of demand between goods X and Y is -3.5. If the price of X decreases by 7 percent, the quantity demanded of Y will: A. decrease by 24.5 percent.B. decrease by 2.45 percent.C.increase by 24.5 percent.D. increase by 2.45 percent.

answer

increase by 24.5 percent

question

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

answer

less than the long run response

question

The cross-price elasticity of demand for books and magazines is -2.0. If the price of magazines decreases by 10 percent, the quantity demanded of books will: A. fall by 2.0 percent.B. rise by 2.0 percent.C. fall by 20 percent.D.rise by 20 percent.

answer

rise by 20%

question

If the demand function for a particular good is Q = 25 - 10P, then the price elasticity of demand (in absolute value) at a price of $1 is: A. 8.B. 2.C.2/3.D. 1/8.

answer

2/3

question

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, Pfdenotes 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: 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.

answer

the video recorders are normal goods and the video recorder film is a complement for video recorders

question

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

answer

none of the statements is correct

question

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

answer

fall by 35%

question

When the price of sugar was "low," consumers in the United States spent a total of $3 billion annually on its consumption. When the price doubled, consumer expenditures actually INCREASED to $4 billion annually. This indicates that: A. the demand for sugar is elastic.B. the demand curve for sugar is upward sloping.C. sugar is a Giffen good.D.None of the statements is correct.

answer

non of the statements is correct

question

The demand for which of the following commodities is likely to be most price inelastic? A.FoodB. HamburgersC. Big MacsD. Sandwiches

answer

food

question

If the demand function for a particular good is Q = 20 - 8P, then the price elasticity of demand (in absolute value) at a price of $1 is: A. 8.B. 2.C.2/3.D. 1/8.

answer

2/3

question

Assume that the price elasticity of demand is -0.75 for a certain firm's product. If the firm lowers price, the firm's managers can expect total revenue to: A.decrease.B. increase.C. remain constant.D. either increase or remain constant, depending upon the size of the price decrease.

answer

decrease

question

Suppose the demand for a product is Qxd = 12 - 3 ln Px. Then demand for product x is: A. inelastic.B. unitary elastic.C.elastic.D. It cannot be determined without more information.

answer

elastic

question

The demand for good X has been estimated by Qxd = 6 - 2Px + 5Py. Suppose that good X sells at $3 per unit and good Y sells for $2 per unit. Calculate the own price elasticity. A. -0.3B. -0.4C. -0.5D.-0.6

answer

-0.6

question

The own price elasticity of demand for apples is -1.5. If the price of apples falls by 6 percent, what will happen to the quantity of apples demanded? A. It will increase 4 percent.B.It will increase 9 percent.C. It will fall 4 percent.D. It will fall 6 percent.

answer

it will increase by 9%

question

If quantity demanded for sneakers falls by 6 percent when price increases 20 percent, we know that the absolute value of the own price elasticity of sneakers is: A.0.3.B. 0.7.C. 2.3.D. 3.3.

answer

0.3

question

f the cross-price elasticity between ketchup and hamburgers is -2.5, a 2 percent increase in the price of ketchup will lead to a: A. 5 percent drop in quantity demanded of ketchup.B.5 percent drop in quantity demanded of hamburgers.C. 5 percent increase in quantity demanded of ketchup.D. 5 percent increase in quantity demanded of hamburgers.

answer

5% drop in quantity demanded of hamburgers

question

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

answer

15% increase in demand for lobster

question

You are the manager of a popular hat company. You know that the advertising elasticity of demand for your product is 0.25. How much will you have to increase advertising in order to increase demand by 5 percent? A. 0.05 percentB.20 percentC. 25 percentD. 1.25 percent

answer

20%

question

The statistical analysis of economic phenomena is defined as: A. standard error.B. confidence intervals.C. the t-statistic. D.econometrics

answer

econometrics

question

Which of the following provides a measure of the overall fit of a regression? A. t-statisticB.F-statisticC. P-valueD. The t-statistic and the P-value

answer

f statistic

question

As a general rule of thumb, a manager can be 95 percent confident that the true value of the underlying parameter in the regression is not zero, when the absolute value of the t-statistic is: A. greater than zero.B. greater than or equal to 1.C.greater than or equal to 2.D. None of the statements is correct.

answer

greater than or equal to 2

question

If the own price elasticity of demand is infinite in absolute value, then: A.demand is perfectly elastic.B. the demand curve is vertical.C. consumers do not respond at all to changes in price.D. the demand curve is vertical and consumers do not respond at all to changes in price.

answer

demand is perfectly elastic

question

When a demand curve is linear: A. demand is elastic at low prices.B.demand is inelastic at low prices.C. demand is unitary elastic at low prices.D. the elasticity is constant at all prices.

answer

demand is inelastic at low prices

question

Lemonade, a good with many close substitutes, should have an own price elasticity that is: A. unitary.B.relatively elastic.C. relatively inelastic.D. perfectly inelastic.

answer

relatively elastic