Question

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

Multiple Choice

• 61,500

• 61,300

• 61,300 − 4P_X

• 61,500 − 4P_X

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 Q_x^d = 21 − 0.8 ln P_x − 1.6 ln P_y + 6.2 ln M + 0.4 ln A_x. Then we know goods x and y are:

Multiple Choice

• substitutes.

• complements.

• normal goods.

• inferior goods.

Answer 1