Question:

6) One reason that direct marketing techniques have become so popular for internet advertising is that they offer ample opportunity to test new concepts in an experimental context. For example, Bob just read that using an orange "submit order" button increases both number of orders submitted and the average amount of an order. Bob knows that such "findings" often vary from site to site. Since he does not care at all about any other site, he decides to test this idea using an experiment on his site.

He randomly assigns 500 regular customers to see the orange submit order button when they visit his site, while the remaining regular customers continue to see the regular white submit button.

He looks at sales from the previous month for the 500 test subjects and finds the average sale is $75.50; the average previous month sale for the remaining regular customers is $77.00.

After a one month test, he finds that the test group (the 500 orange button customers) has an average sales amount of $90.00, while the remaining regular customers have an average sales amount of $86.50.

Bob performs a two-tailed difference of means test. Assume his boss uses an alpha level of .05, and Bob finds a p-value of .002.

a) What is your best estimate of the quantitative effects of the orange submit order button? How did you arrive at this answer? (6 points) (I am not looking for a statistical analysis here, but I would like to see a number.)

b) Identify and explain one threat to internal validity which is NOT a problem here, given the design of the experiment. (6 points) In what sense is this threat "controlled for?" (6 points)

c) In general, do you think these results have relatively high or low external validity? Why?

Three economic questions must be determined in all societies. What are they? ()a) What is the opportunity cost of production? Does the society have a comparative advantage in production? Will consumers desire the goods being produced? O b) What goods will be produced? How will goods be produced? For whom will goods be produced? ( c) What will the price of each good be? Who will produce each good? Who will consume each good? d) How much will be produced? When will it be produced? How much will it cost? How do microeconomics and macroeconomics differ? ()a) Microeconomics studies aggregate decision making, while macroeconomics examines individual decision making- (b) Microeconomics utilizes positive economic analysis, while macroeconomics utilizes normative economic analysis. c) Microeconomics is concerned with consumer behaviour, while macroeconomics is concerned with firm behaviour. ()d) Microeconomics studies individual decision making, while macroeconomics examines aggregate decision making.Markets for Goods end Services Fimys Households G Markets for Factors of D Production Refer to Figure 2-1 Which anow represents the flow of land, labor, and capital? ObD OCB ode Saved QUESTION 13 3.00000 points In the markets for the factors of production in the circula flow diagram O a households and firms are both buyers. b households and firms are both sellers O c households are buyers and firms are sellers, "d households are sellers and firms are buyers.Question 10 Welfare economics Not yet answered Select one: Marked out of O a. only looks at the poorest parts of the economy. cross out 1.00 b. examines the social desirability of alternative economic states. cross out Flag question c. does not depend on market interactions. cross out O d. uses only concepts of efficiency to evaluate the alternatives. cross out