1. If OPEC increases its price of oil, and still the demand for oil decreases by a very small amount, we can conclude that the demand for oil is a. relatively elastic. b. relatively inelastic. c. perfectly elastic. d. perfectly inelastic. 2. If an item has several good substitutes, the demand curve for that item is likely to be a. relatively inelastic. b. relatively elastic. c. perfectly inelastic. d. unit elastic. 3. When purchases of tennis socks decline following an increase in the price of tennis sneakers (other things remaining equal), the relationship between these two items can be described as a. complementary. b. substitutable. c. unique. d. ordinary. 4. The owner of a produce store found that when the price of a head of lettuce was raised from 50 cents to $1, the quantity sold per hour fell from 18 to 8. The arc elasticity of demand for lettuce is a. -0.56. b. -1.57. C. -0.8. d. -1.15. 5. If a firm decreases the price of a good and total revenue decreases, then a. the demand for this good is price inelastic. b. the demand for this good is price elastic. c. the cross elasticity is negative. d. the income elasticity is less than 1. 5. The government unit that wants to achieve "revenue enhancement" will find it considerably more favorable to enact an excise tax on goods whose demand is a. highly elastic. b. relatively elastic. c. highly inelastic. d. unitary elastic. 7. Which of the following is a test of the statistical significance of the entire regression equation? a. F-test b. R2 C. t-test Durbin-Watson test 8. When the R2 of a regression equation is very high, it indicates that a. all the coefficients are statistically significant. b. the intercept term has no economic meaning. c. a high proportion of the variation in the dependent variable can be accounted for by the variation in the independent variables. d. there is a good chance of serial correlation and so the equation must be discarded.9. Which of the following indicators will always improve when more variables are added to a regression equation? a. the magnitudes of the coefficients b. R2 c. the t-test . the standard errors of the coefficients 10. Which of the following is most likely to indicate a statistically significant regression coefficient? a. [t| > R2 b. R2 >.90 c. It| > 2 d. It| >4 11. The XYZ company is a producer of dishwashers. The company's marketing department has estimated the following demand curve for the company's best-selling model in one of its regions. Q = 2000 - 4P + 6A + 5/ + 5PC - 4AC where Q = Number of dishwashers demanded P = $600; Price of dishwashers A = $150; Advertising expenditures (thousands) 1= $50; GDP per capita (thousands) PC = $500; Competitor's price AC = $200; Competitor's advertising expenditures (thousands) Calculate the amount demanded for this product using the information given above. 12. The XYZ company is a producer of dishwashers. The company's marketing department has estimated the following demand curve for the company's best-selling model in one of its regions. Q = 2000 - 4P + 6A + 5/ + 5PC - 4AC where Q = Number of dishwashers demanded P = $600; Price of dishwashers A = $150; Advertising expenditures (thousands) 1= $50; GDP per capita (thousands) PC = $500; Competitor's price AC = $200; Competitor's advertising expenditures (thousands) Calculate the price to sell 3450 units. 13. The XYZ company is a producer of dishwashers. The company's marketing department has estimated the following demand curve for the company's best-selling model in one of its regions. Q = 2000 - 4P + 6A + 5/ + 5PC - 4AC where Q = Number of dishwashers demanded P = $600; Price of dishwashers A = $150; Advertising expenditures (thousands) 1 = $50; GDP per capita (thousands] PC = $500; Competitor's price AC = $200; Competitor's advertising expenditures (thousands) What would be the effect on the sales of dishwashers if the competitor reduces price by $50? [Note: if there is a decrease, you must have a minus (-) sign in front of your numerical answer with no space, e.g. a drop of 50 would be -50.)