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When marginal revenue is zero, demand will be
Correct answer(s):
- Unit elastic
Which of the following is a correct statement about the own-price elasticity of demand?
Correct answer(s):
- All of the statements are correct
The demand for Cinnamon Toast Crunch brand cereal is
Correct answer(s):
- More elastic than the demand for cereal in general
When a demand curve is linear,
Correct answer(s):
- Demand is inelastic at low prices
If the own price elasticity of demand is infinite in absolute value, then
Correct answer(s):
- Demand is perfectly elastic
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
Correct answer(s):
- Greater than or equal to two
Which of the following provides a measure of the overall fit of a regression?
Correct answer(s):
- F-statistic
The statistical analysis of economic phenomenon is defined as:
Correct answer(s):
- Econometric
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%?
Correct answer(s):
- 20%
If the income elasticity for lobster is.6, a 25% increase in income will lead to a
Correct answer(s):
- 15% increase in demand for lobster
If the cross-price elasticity between ketchup and hamburgers is -2.5, a 2% increase in the price of ketchup will lead to a
Correct answer(s):
- 5% drop in demanded of hamburgers
If quantity demanded for sneakers falls by 6% when price increases 20% we know that the absolute value of the own-price elasticity of sneakers is
Correct answer(s):
- 0.3
The own-price elasticity of demand for apples is -1.5. If the price of apples falls by 6%, what will happen to the quantity of apples demanded?
Correct answer(s):
- It will increase 9%
The demand for good X has been estimated by QX d = 6 – 2PX + 5PY. Suppose that good X sells at $3 per unit and good Y sels flor $2 per unit. Calculate the own price elasticity.
Correct answer(s):
- -0.6
Suppose the demand for a product is QX d = 12 – 3 lnPX then product X is
Correct answer(s):
- Elastic
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
Correct answer(s):
- Decrease
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
Correct answer(s):
- 2/3
The demand for which of the following commodities is likely to be more price inelastic?
Correct answer(s):
- Food
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
Correct answer(s):
- None of the statements associated with this question are correct
The cross-price elasticity of demand for textbooks and copies of old exams is -3.5. If the price of copies of old exams increase by 10 percent, the quantity demanded of textbooks will
Correct answer(s):
- Fall by 35 percent