Question 1. Which of the following applies most generally to supply in the long run?
a. Average cost must decline
b. Selllers are able to make adjustments in all of their factors of production.
c. Sellers are only able to make adjustments in their variable factors of production
d. All original sellers will leave the market
Question 2. Which of the following is most likely to indicate statistically significant regression coefficient?
a. t >R2
b. R2 > .90
c. t > 2
d. F > 4
Question 3. In the estimation of demand, the "identifcation problem" refers to
a. the problem of selecting the proper level of significance.
b. the problem of deciding whether to use time series or cross-sectional data.
c. the problem of separating out the effects of price on the quantity demanded when supply cannot be held constant.
d. the problem of having insufficient variation in prices.
Question 4. Which of hte following would cause an increase in the demand for a good?
a. A decrease in price
b. An increase in consumer tastes for the good
c. A decrease in the price of a substitute good
d. Consumers expect the price of the good to fall in the near future.
Question 5. Complete the following statement: An import ban increases the price of sugar, decreases the quantity of sugar, and ______________ the output of the domestic sugar industry.
a. increases
b. decreases
c. remains unchanged
d. none of the above
Question 6. Suppose the price elasticity of the supply of cheese is 0.80. If the price of cheese rises by .20%, by what percentage will the quantity of cheese supplied increase?
a. 8%
b. 20%
c. 28%
d. 16%
Question 7. Suppose the elasticity of demand for chewing tobacco is 0.70, and the elasticity of supply is 2.30. If an anti-chewing campaign decreases the demand for chewing tobacco by 30%, by what percentage will the price of chewing tobacco change?
a. 70%
b. 30%
c. 100%
d. 10%
Question 8. From a management policy perspective, which regression result is the most useful?
a. a regression equation that passes the F-test
b. a regression equation whose explanatory varaible all pass the t-test
c. a regression equation that has the highest R2
d. a regression equation that has the least number of dummy variables