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Economics MCQs
Managerial Economics
Quiz # 4, MCQs
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1)
The estimation of consumer demand by setting up simulated stores, providing a sample of consumers with money, and then allowing them to purchase and keep the commodities they select in the stores is called the
- A) consumer survey approach
- B) observational research approach
- C) consumer clinic approach
- D) market experiment approach
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2)
The estimation of consumer demand by monitoring actual purchasing and consumption behavior by a sample of consumers is called the
- A) consumer survey approach
- B) observational research approach
- C) consumer clinic approach
- D) market experiment approach
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3)
If the t ratio for the slope of a simple linear regression equation is -2.48 and the critical values of the t distribution at the 1% and 5% levels, respectively, are 3.499 and 2.365, then the slope is
- A) not significantly different from zero
- B) significantly different from zero at both the 1% and the 5% levels
- C) significantly different from zero at the 1% level but not at the 5% level
- D) significantly different from zero at the 5% level but not at the 1% level.
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4)
Ordinary least squares is used to estimate a linear relationship between a firm's quantity sold per month and its total promotional expenditures and the slope of the linear function is found to be positive and significantly different from zero. Assuming that all other variables, including product price, were constant during the period covered by the data set, this result implies that
- A) the firm should spend more on promotional expenditures
- B) the firm should spend less on promotional expenditures
- C) promotional expenditures influence demand
- D) promotional expenditures have no influence on demand
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5)
The coefficient of determination
- A) is maximized by ordinary least squares
- B) has a value between zero and one
- C) will generally increase if additional independent variables are added to a regression analysis
- D) d. All of the above are correct
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6)
Auto-correlation may be the result of
- A) the omission of an important explanatory variable
- B) the presence of a trend in the independent variable
- C) non-linearities in the relationship between the dependent and independent variables
- D) All of the above are correct
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7)
Which of the following is a criticism of the theory of monopolistic competition
- A) It is difficult to define a monopolistically competitive market and to determine the firms and products that comprise it
- B) When product differentiation is slight, each firm's demand curve is nearly horizontal so the perfectly competitive solution provides an adequate approximation to the monopolistically competitive solution
- C) When there are strong brand preferences and few producers of many differentiated products, or when there are many producers but only a few compete as rivals for any given consumer, then the oligopoly solution provides an adequate approximation to the monopolistically competitive solution
- D) All of the above are correct
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8)
Which of the following industries is most likely to be monopolistically competitive?
- A) The automobile industry
- B) The steel industry
- C) The car repair industry
- D) The electrical generating industry
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9)
If an imperfectly competitive firm is producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and price is equal to average total cost, then the firm is
- A) in long-run equilibrium
- B) in short-run equilibrium.
- C) minimizing short-run average total cost
- D) breaking even
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10)
The number of persons wanting tickets to Super Bowl games is invariably greater than the number of tickets (and seats) available. This is evidence that the price of the tickets is
- A) higher than the competitive equilibrium price
- B) equal to the competitive equilibrium price since the number of tickets bought equals the number sold
- C) lower than the competitive equilibrium price.
- D) higher than the competitive equilibrium price when the demand is inelastic but lower when the demand is elastic.
