Question

1- The demand for good X is estimated to be Qxd = 10,000 − 4PX +...

1- The demand for good X is estimated to be Qxd = 10,000 − 4PX + 5PY + 2M + AX where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. What is the quantity demanded of good X?

Multiple Choice

  • 61,500

  • 61,300

  • 61,300 − 4PX

  • 61,500 − 4PX

2- You use regression analysis to find the relationship between education (explanatory variable) and wage (response variable). The p-value for the estimated coefficient for education is 0.15. You can conclude that the education coefficient is statistically different than zero.

True or False

True / False

3- Suppose the demand for good x is ln Qxd = 21 − 0.8 ln Px − 1.6 ln Py + 6.2 ln M + 0.4 ln Ax. Then we know goods x and y are:

Multiple Choice

  • substitutes.

  • complements.

  • normal goods.

  • inferior goods.

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