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Suppose a consumer with an income of $100 who is faced with PX = 1 and PY = 1/2. What is the market rate of substitution between good X (horizontal axis) and good Y (vertical axis)?
Correct answer(s):
- -2.0
A firm derives revenue from two sources: goods X and Y. Annual revenues from good X and Y are $10,000 and $20,000, respectively. If the price elasticity of demand for good X is -2.0 and the cross-price elasticity of demand between Y and X is 1.5 then a 4 percent price increase will
Correct answer(s):
- Increase total revenues from X and Y by $800
A firm derives revenue from two sources: goods X and Y. Annual revenues from good X and Y are $10,000 and $20,000, respectively. If the price elasticity of demand for good X is -4.0 and the cross-price elasticity of demand between Y and X is 2.0 then a 2 percent price decrease will
Correct answer(s):
- Increase total revenues from X and Y by $520
Suppose the equilibrium price in the market is $60 and the marginal revenue associated with the linear (inverse) demand function is $20. Then we know that the own price elasticity of demand is
Correct answer(s):
- Cannot be determined from the information contained in the question
Suppose the equilibrium price in the market is $100 and the marginal revenue associated with the linear (inverse) demand function is $50. Then we know that the own price elasticity of demand is
Correct answer(s):
- -1
Suppose that at the equilibrium price and quantity the marginal revenue is -$15 and the price elasticity of demand for a linear demand function is -0.75. Then we know that the equilibrium price is
Correct answer(s):
- $45
Suppose the equilibrium price in the market is $10 and the price elasticity of demand for the linear demand function at the market equilibrium is -1.25. Then we know that
Correct answer(s):
- Marginal revenue is $2
When marginal revenue is negative, demand is
Correct answer(s):
- Inelastic
When marginal revenue is positive, demand is
Correct answer(s):
- Elastic
When marginal revenue is zero, total revenue
Correct answer(s):
- Is maximized
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