Question 1(1 point)

Consider the market for bicycles (a normal good). All else being constant, when the price of an input needed to make bicycles increases,

Question 1 options:

	the supply curve shifts to the right and more bicycles are available at each given price.
	the supply curve shifts to the left and less bicycles are available at each given price.
	the demand curve shifts to the left and less bicycles are demanded at each given price.
	the demand curve shifts to the right and more bicycles are demanded at each given price.

Question 2(1 point)

Suppose the demand function is given by Q_x^d= 4P_x^0.5P_y^-0.45M^-0.2H. Then good X

Question 2 options:

	is a substitute for good Y.
	is an inferior good.
	is a luxury good.
	is a Giffen good.

Question 3(1 point)

If the absolute value of the own price elasticity of demand is greater than 1, then demand is said to be

Question 3 options:

	inelastic.
	unitary elastic.
	elastic.
	neither elastic, inelastic, nor unitary elastic.

Question 4(1 point)

Suppose demand is given by Q_x^d= 50 4P_x+ 6P_y+ A_x, where P_x= $8, P_y= $2, and A_x= $50. What is the own price elasticity of demand for good x?

Question 4 options:

	0.4
	0.85
	1.11
	1.25

Question 5(1 point)

Assume that hot dog and hot dog buns are complementary goods. If the price of hot dogs falls, all else constant, then this will cause

Question 5 options:

	a decrease in the demand for hot dogs.
	an increase in the quantity demanded for hot dogs.
	a decrease in the demand for hot dog buns.
	an increase in the demand for hot dogs.

Question 6(1 point)

If the own price elasticity of demand is infinite in absolute value, then

Question 6 options:

	the demand curve is horizontal.
	demand is neither perfectly inelastic nor is the demand curve horizontal.
	consumers do not respond at all to changes in price.
	demand is perfectly inelastic.

Question 7(1 point)

The elasticity of demand for gasoline has been estimated to be 2.0, and the standard error is 0.25. The t-statistic for the estimated elasticity of demand for gasoline is

Question 7 options:

	8, indicating a statistically significant elasticity estimate at the 95 percent confidence level.
	8, indicating a statistically insignificant elasticity estimate at the 95 percent confidence level.
	0.5, indicating a statistically significant elasticity estimate at the 95 percent confidence level.
	0.5, indicating a statistically insignificant elasticity estimate at the 95 percent confidence level.

Question 8(1 point)

Suppose market demand and supply are given by Q^d= 100 2P and Q^S= 5 + 3P. The equilibrium price is

Question 8 options:

	$19.
	$15.
	$17.
	$20.

Question 9(1 point)

Suppose the graph shows the market of bicycle helmets. The equilibrium price is $10. To make helmets more affordable, the government imposes a price ceiling of $6 for bicycle helmets. Thus the nonpecuniary price is

Question 9 options:

	$6.
	indeterminable.
	$18.
	$12.

Question 10(1 point)

Which of the following measures of fit penalizes a researcher for estimating many coefficients with relatively little data?

Question 10 options:

	R-square
	adjusted R-square
	t-statistic
	neither the t-statistic, the R-square, nor the adjusted R-square

Question 11(1 point)

Suppose the graph shows the market for bushels of wheat. What is producer surplus at 20?

Question 11 options:

	$4,000
	$4,500
	$950
	$2,250

Question 12(1 point)

The statistical analysis of economic phenomena is defined as

Question 12 options:

	variance.
	confidence intervals.
	econometrics.
	standard deviation.

Question 13(1 point)

A lump sum or a fixed tax of $1 on ticket rides in amusement parks will change the equilibrium price of ticket rides by

Question 13 options:

	an indeterminable amount.
	less than $1.
	more than $1.
	$1.

Question 14(1 point)

Suppose the demand function is given by Q_x^d= 10P_x^0.9P_y^0.5M^0.22H. Then the cross-price elasticity between goods x and y is

Question 14 options:

	0.22.
	0.9.
	0.5.
	0.5.

Question 15(1 point)

Which of the following provides a measure of the overall fit of a regression?

Question 15 options:

	the F-statistic and R-square
	R-square
	t-statistic
	F-statistic

Question 16(1 point)

When the price of peanut oil falls from $5 to $4 per gallon, quantity demanded increases from 8 to 10 gallons per month. Based on this information, the absolute value of the price elasticity of demand using the midpoint method is

Question 16 options:

	0.8 and demand is relatively elastic.
	1.25 and demand is relatively inelastic.
	1.25 and demand is relatively elastic.
	1.0 and demand is unit elastic.

Question 17(1 point)

If the own price elasticity of demand is infinite in absolute value, then

Question 17 options:

	demand is neither perfectly inelastic nor is the demand curve horizontal.
	consumers do not respond at all to changes in price.
	demand is perfectly inelastic.
	the demand curve is horizontal.

Question 18(1 point)

Suppose the demand for good X is given by Q^d_x= 10 + a_xP_x+ a_yP_y+ a_MM. From the law of demand, we know that a_xwill be

Question 18 options:

	zero.
	greater than zero.
	less than zero.
	zero or less than or greater than zero.

Question 19(1 point)

Suppose good X is a normal good. Then a decrease in income would lead to

Question 19 options:

	no shift of the demand curve.
	a movement along the demand curve.
	an inward shift of the demand curve.
	an outward shift of the demand curve.

Question 20(1 point)

Graphically, a decrease in advertising will cause the demand curve to

Question 20 options:

	shift leftward.
	become steeper.
	shift rightward.
	become flatter.

Question 21(1 point)

Good X is a normal good if an increase in income leads to

Question 21 options:

	a decrease in the supply for good X.
	a decrease in the demand for good X.
	an increase in the demand for good X.
	an increase in the supply for good X.

Question 22(1 point)

In a competitive market, the market demand is Q^d= 60 6P and the market supply is Q^s= 4P. A price ceiling of $3 will result in a

Question 22 options:

	surplus of 12 units.
	surplus of 30 units.
	shortage of 15 units.
	shortage of 30 units.

Question 23(1 point)

Suppose the demand for X is given by Q_xd= 80 P_X3P_Y5M + 3A, where P_Xrepresents the price of good X, P_Yis the price of good Y, M is income, and A is the amount of advertising on good X. Based on this information, we know that

Question 23 options:

	good X is a complement for good Y.
	good X is a substitute for good Y.
	good Y is an inferior good.
	good X is a normal good.

Question 24(1 point)

A price elasticity of zero corresponds to a demand curve that is

Question 24 options:

	vertical.
	horizontal.
	either vertical or horizontal.
	downward sloping with a slope always equal to 1.

Question 25(1 point)

Suppose a regression with 51 observations returns a regression sum of squares of 56,000 and a total sum of squares of 250,000. The associated residual sum of squares is

Question 25 options:

	120,000.
	150,000.
	194,000.
	200,000.

Question 26(1 point)

Suppose that you are the owner of a dairy mart. You receive revenues from sales of soda and potato chips. If the cross-price elasticity of demand between the two products is 0.87 and you lower the price of soda, then demand for potato chips

Question 26 options:

	is indeterminable.
	increases.
	does not change.
	decreases.

Question 27(1 point)

Suppose the demand function is given by Q_x^d= 8P_x^-0.5P_y^0.25M^0.12H. Then the demand for good x is

Question 27 options:

	inelastic.
	unitary.
	perfectly elastic.
	elastic.

Question 28(1 point)

Suppose demand is given by Q_x^d= 50 4P_x+ 6P_y+ A_x, where P_x= $2, P_y= $2, and A_x= $50. What is the own price elasticity of demand for good x?

Question 28 options:

	1.81
	2.62
	1.15
	0.75

Question 29(1 point)

Based on the graph, which of the following movements show the effect of a decrease in income for good X an inferior good?

Question 29 options:

	point D to point A
	point A to point B
	point B to point A
	point A to point D

Question 30(1 point)

Suppose a regression with 51 observations returns a regression sum of squares of 56,000 and a total sum of squares of 250,000. The associated residual sum of squares is

Question 30 options:

	200,000.
	120,000.
	194,000.
	150,000.

Question 31(1 point)

The minimum legal price that can be charged in a market is

Question 31 options:

	a price floor.
	full economic price.
	a price ceiling.
	nonpecuniary price.

Question 32(1 point)

Suppose the graph shows the market of wheat. The equilibrium price is $25 of wheat. To support incomes of farmers, the government imposes a price floor of $35. What is the resulting producer surplus at $35?

Question 32 options:

	$5,000
	$4,000
	$7,000
	$14,000

Question 33(1 point)

An increase in the price of steak will probably lead to

Question 33 options:

	an increase in demand for steak.
	an increase in the supply for chicken.
	no change in the demand for steak or chicken.
	an increase in demand for chicken.

Question 34(1 point)

The statistical analysis of economic phenomena is defined as

Question 34 options:

	variance.
	standard deviation.
	econometrics.
	confidence intervals.

Question 35(1 point)

In a competitive market, the market demand is Q^d= 60 6P and the market supply is Q^s= 4P. The full economic price under a price ceiling of $3 is

Question 35 options:

	6.
	8.
	9.
	7.

Question 36(1 point)

A price elasticity of zero corresponds to a demand curve that is

Question 36 options:

	either vertical or horizontal.
	downward sloping with a slope always equal to 1.
	horizontal.
	vertical.

Question 37(1 point)

Suppose the demand function is given by Q_x^d= 8P_x^-0.5P_y^0.25M^0.12H. Then the demand for good x is

Question 37 options:

	elastic.
	unitary.
	perfectly elastic.
	inelastic.

Question 38(1 point)

Suppose that you are the owner of a dairy mart. You receive revenues from sales of soda and potato chips. If the cross-price elasticity of demand between the two products is 0.87 and you lower the price of soda, then demand for potato chips

Question 38 options:

	is indeterminable.
	increases.
	does not change.
	decreases.

Question 39(1 point)

Suppose the demand function is given by Q_x^d= 4P_x^0.5P_y^-0.45M^-0.2H. Then good X

Question 39 options:

	is a luxury good.
	is an inferior good.
	is a substitute for good Y.
	is a Giffen good.

Question 40(1 point)

The elasticity of demand for gasoline has been estimated to be 2.0, and the standard error is 0.25. The t-statistic for the estimated elasticity of demand for gasoline is

Question 40 options:

	8, indicating a statistically insignificant elasticity estimate at the 95 percent confidence level.
	0.5, indicating a statistically significant elasticity estimate at the 95 percent confidence level.
	0.5, indicating a statistically insignificant elasticity estimate at the 95 percent confidence level.
	8, indicating a statistically significant elasticity estimate at the 95 percent confidence level.