mathematics

If the consumer has $22 to spend on X and Y, the utility-maximizing bundle is

3X and 4Y.

5X and 3Y.

7X and 2Y.

1X and 5Y.

Question 21
Honda Accord and Toyota Camry
are substitutes. If Toyota Camry’s price rises, then Honda Accord’s market equilibrium price will be likely to ____ and market equilibrium quantity will be likely to ____.

increase; increase

increase; decrease

decrease; decrease

decrease; increase

Question 22
Suppose a company incurs the following costs:
Labor                           $9,000
Equipment (Capital)     $6,000
Materials                      $7,000
The company owns the building, so it doesn’t have to pay the usual $2,000 in rent. The total economic cost is ______; the total accounting cost is _______.

$17,000; $15,000
$24,000; $17,000
$24,000; $22,000
$17,000; $22,000

Question 23
When we construct a regression function of demand on a product, which of the following should not be considered as an appropriate independent variable?
Unit production cost
Consumers’ income
Price of substitutes
Price of the product

Question 24
When the accounting profit equals the implicit costs, the firm earns
a normal profit.
a positive economic profit.
a zero accounting profit.
a negative accounting profit.
Question 25
The next 4 questions (25~28) refer to the following:
The estimated regression function of demand for a good is
Q = 20 − 0.5P + 0.02M − 0.1PR
where Q is the quantity demanded of the good; P is the price of the good; M is income; PR is the price of related good.

The coefficient of P implies that
the function violates the law of demand.
the price elasticity of demand is − 0.5.
if the good’s price increases by 1 then quantity demanded will decrease by 0.5.
the good is an inferior good.
Question 26
The estimated regression function of demand for a good is
Q = 20 − 0.5P + 0.02M − 0.1PR
where Q is the quantity demanded of the good; P is the price of the good; M is income; PR is the price of related good.

The coefficient of M implies that

the income elasticity is 0.02.

the good is a normal good.

income is not an important determinant for demand.

if income declines by 1 then quantity demanded will increase by 0.02.

Question 27
The estimated regression function of demand for a good is

Q = 20 − 0.5P + 0.02M − 0.1PR
where Q is the quantity demanded of the good; P is the price of the good; M is income; PR is the price of related good.

The coefficient of PR implies that

the good is an inferior good.

the good and the related good are substitutes.

the good and the related good are complements.

the demand on the related good is inelastic.

Question 28
The estimated regression function of demand for a good is

Q = 20 − 0.5P + 0.02M − 0.1PR
where Q is the quantity demanded of the good; P is the price of the good; M is income; PR is the price of related good.

The price elasticity of demand, given P=10; M=100; PR=20, should be

−1.33.

−0.66.

−0.50.

-0.33

Question 29
When the price of Washington apples increases, which of the following change is most unlikely, if all the other factors remain?

Quantity demanded of Washington apples decreases.

Demand on Fuji apples increases.

Supply on apple juice increases.

Quantity supplied of Washington apple increases.

Question 30
For a firm’s decision-making, the principal-agent problem arises when

the principal and the agent have different objectives.

the agent cannot enforce the principal to manage well.

there are too many principals but only few agents.

the agent considers to maximize the firm’s wealth.

Question 31
The ABC Company developed the following quarterly sales forecasting model:

Yt= 5.8 + 0.03t

where Yt = predicted sales ($million) in quarter t; t = 1 (First quarter of 2005), 2 (Second quarter of 2005), 3 (Third quarter of 2005), and so on. Given the model, the sales for the fourth quarter of 2012 are forecasted as.

$6.76 million.

$7.00 million.

$14.20 million.

$15.40 million

•      Question 32 of 47
•     Moving to another question will save this response.
Question 32
Which of the following is most unlikely to be an appropriate independent variable to construct the market demand on DVD movie rental?

Movie theater box office ticket price.

Number of movie theaters.

Household income level.

Population of movie goers
Question 33
Which of the following will never be negative in economic theory?

Cross-price elasticity

Marginal utility

Income elasticity of demand

Marginal cost

Question 34
A simple linear regression model has the coefficient of determination, r2 =0.81. We can conclude that

the model is not a good fit.

only 19% variation of the dependent variable are determined by other factors not considered in the model.

about 81% of the independent variables can determine the dependent variable.

the independent variable and the dependent variable are not related.

Question 35
Moving along a downward sloping linear demand curve from top to bottom, the point elasticity of demand

is constant everywhere.

becomes more inelastic.

becomes more elastic.

changes randomly

Question 36
The next 3 questions (36~38) refer to the following:
The linear regression equation, Y = a + bX, was estimated. The following computer printout was
obtained:
DEPENDENT VARIABLE:    Y    R−SQUARE    F−RATIO    P−VALUE ON F
OBSERVATIONS:    21    0.8662    6.1798    0.0274

VARIABLE         PARAMETER
ESTIMATE    STANDARD
ERROR
RATIO
P−VALUE

INTERCEPT         7.85    3.19    2.94    0.0008
X         0.36    6.88    −2.46    0.0274
The parameter estimate of a indicates

whenX
is zero, Y is 7.85.
whenX
is zero, Y is 3.19.
whenY
is zero, X is 0.36.
whenY
is zero, X is 6.88
Question 37
The linear regression equation, Y = a + bX, was estimated. The following computer printout was
obtained
DEPENDENT VARIABLE:    Y    R−SQUARE    F−RATIO    P−VALUE ON F
OBSERVATIONS:    21    0.8662    6.1798    0.0274

VARIABLE         PARAMETER
ESTIMATE    STANDARD
ERROR
RATIO
P−VALUE
INTERCEPT         7.85    3.19    2.94    0.0008
X         0.36    6.88    −2.46    0.0274
The parameter estimate of b indicates
X
increases by 0.36 units when Y increases by one unit.
X
decreases by 1 units when Y increases by 0.36 units.
a 10-unit decrease in X results in a 3.6 units decrease in Y.
a 10-unit increase in X results in a 78.5 units increase in Y.
Question 38
The linear regression equation, Y = a + bX, was estimated. The following computer printout was
obtained
DEPENDENT VARIABLE:    Y    R−SQUARE    F−RATIO    P−VALUE ON F
OBSERVATIONS:    21    0.8662    6.1798    0.0274
VARIABLE         PARAMETER
ESTIMATE    STANDARD
ERROR
RATIO
P−VALUE
INTERCEPT         7.85    3.19    2.94    0.0008
X         0.36    6.88    −2.46    0.0274
Assume the default level of significance is at 0.05. The regression equation is considered as ______ for sample and (but) ______ applied significantly for population estimation.
a good fit; can be
not a good fit; can be
a good fit; cannot be
not a good fit; cannot be
Question 39
The following figure shows two demand curves at price = P*.
Which of the following is most likely to explain the shapes of demand curve correctly?
Demand on A is more elastic.
If both A and B represent the same product, then A is for short-run demand and B is for long-run demand.
A has more substitutes.
B has a smaller share in consumers’ expenditure (budget).
Question 40
If both demand and supply were to increase, then the market equilibrium
quantity would fall and price might rise or fall.
quantity would rise and price might fall or rise.
price would fall and quantity might rise or fall.
price would be unchanged and quantity might fall.
Question 41
Diamonds are more expensive than water because
diamonds yield higher total utility.
market does not really reflect water’s value.
diamonds are rare.
diamonds yield higher marginal utility.

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