Reference no: EM13815231

Question 1:

An example of a time series data set is one for which the:

Answer

data would be collected for a given firm for several consecutive periods (e.g., months).

data would be collected for several different firms at a single point in time.

regression analysis comes from data randomly taken from different points in time.

data is created from a random number generation program.

use of regression analysis would impossible in time series.

Question 2

The forecasting technique which attempts to forecast short-run changes and makes use of economic indicators known as leading, coincident or lagging indicators is known as:
Answer

econometric technique

time-series forecasting

opinion polling

barometric technique

judgment forecasting

Question 3

For studying demand relationships for a proposed new product that no one has ever used before, what would be the best method to use?
Answer

ordinary least squares regression on historical data

market experiments, where the price is set differently in two markets

consumer surveys, where potential customers hear about the product and are asked their opinions

double log functional form regression model

Question 4

The type of economic indicator that can best be used for business forecasting is the:
Answer

leading indicator

coincident indicator

lagging indicator

current business inventory indicator

optimism/pessimism indicator

Question 5

The variation in an economic time-series which is caused by major expansions or contractions usually of greater than a year in duration is known as:

Answer

secular trend

cyclical variation

seasonal effect

unpredictable random factor

Question 6

If two alternative economic models are offered, other things equal, we would
Answer

tend to pick the one with the lowest R2.

select the model that is the most expensive to estimate.

pick the model that was the most complex.

select the model that gave the most accurate forecasts

Question 7

Purchasing power parity or PPP says the ratios composed of:
Answer

interest rates explain the direction of exchange rates.

growth rates explain the direction of exchange rates.

inflation rates explain the direction of exchange rates.

services explain the direction exchange rates.

public opinion polls explain the direction of exchange rates.

Question 8

The import of Apple iPads assembled in Shanghai at a $295 wholesale price ($213 cost and $82 profit margin) adds more than it should to the U.S. trade deficit with China because

Answer

Chinese assembly labor represents only 47 % of the wholesale cost

the iPad's popularity has triggered an enormous number of unit sales

wholesale prices only count in the trade statistics if final product prices are higher

as with foreign-assembled minivans, most of the subassembly components come from the U.S.

the Chinese yuan is a managed currency

Question 9

If Ben Bernanke, Chair of the Federal Reserve Board, begins to tighten monetary policy by raising US interest rates next year, what is the likely impact on the value of the dollar?
Answer

The value of the dollar falls when US interest rates rise.

The value of the dollar rises when US interest rates rise.

The value of the dollar is not related to US interest rates.

This is known as Purchasing Power Parity or PPP.

Question 10

An appreciation of the U.S. dollar has what impact on Harley-Davidson (HD), a U.S. manufacturer of motorcycles?
Answer

domestic sales of HD motorcycles increase and foreign sales of HD motorcycles increase

domestic sales of HD motorcycles decrease and foreign sales of HD motorcycles increase

domestic sales of HD motorcycles increase and foreign sales of HD motorcycles decrease

domestic sales of HD motorcycles decrease and foreign sales of HD motorcycles decrease

Question 11

In Chinese coastal provinces, brick housing for a fast expanding middle class is very comparable in size to housing in the U.S. for a family with median income of $51,000 because
Answer

median income per capita has risen in China to nearly equal median income in the U.S.

the Chinese government builds much of the housing in China

construction companies have begun to migrate to the coastal provinces of China

housing is an income inferior good

bricks, trade skill workers and construction labor are very cheap in China

Question 12

The optimal currency area involves a trade-off of reducing transaction costs but the inability to use changes in exchange rates to help ailing regions. If the US, Canada, and Mexico had one single currency (the Peso-Dollar) we would tend to see all of the following EXCEPT:
Answer

Even more intraregional trade of goods across the three countries.

Lower transaction costs of trading within North America.

A greater difficulty in helping Mexico as you can no longer deflate the Mexican peso.

Less migration of workers across the three countries.

An elimination of correlated macroeconomic shocks across the countries.

Question 13

In an open economy with few capital restrictions and substantial import-export trade, a rise in interest rates and a decline in the producer price index of inflation will
Answer

raise the value of the currency

lower the nominal interest rate

increase the volume of trading in the foreign exchange market

lower the trade-weighted exchange rate

increase consumer inflation.

Question 14:

What method of inventory valuation should be used for economic decision-making problems?
Answer

book value

original cost

current replacement cost

cost or market, whichever is lower

historical cost

Question 15

According to the theory of cost, specialization in the use of variable resources in the short-run results initially in:
Answer

decreasing returns and declining average and marginal costs

increasing returns and declining average and marginal costs

increasing returns and increasing average and marginal costs

decreasing returns and increasing average and marginal costs

Question 16

If TC = 321 + 55Q - 5Q2, then average total cost at Q = 10 is:
Answer

10.2

102

37.1

371

321

Question 17

Economies of Scope refers to situations where per unit costs are:
Answer

Unaffected when two or more products are produced

Reduced when two or more products are produced

Increased when two or more products are produced

Demonstrating constant returns to scale

Demonstrating decreasing returns to scale

Question 18

For a short-run cost function which of the following statements is (are) not true?
Answer

The average fixed cost function is monotonically decreasing.

The marginal cost function intersects the average fixed cost function where the average variable cost function is a minimum.

The marginal cost function intersects the average variable cost function where the average variable cost function is a minimum.

The marginal cost function intersects the average total cost function where the average total cost function is a minimum.

Question 19

The cost function is:
Answer

a means for expressing output as a function of cost

a schedule or mathematical relationship showing the total cost of producing various quantities of output

similar to a profit and loss statement

incapable in being developed from statistical regression analysis

Question 20

If the marginal product of labor is 100 and the price of labor is 10, while the marginal product of capital is 200 and the price of capital is $30, then what should the firm?
Answer

The firm should use relatively more capital

The firm should use relatively more labor

The firm should not make any changes - they are currently efficient

Using the Equimarginal Criterion, we can't determine the firm's efficiency level

Question 21

In a production process, an excessive amount of the variable input relative to the fixed input is being used to produce the desired output. This statement is true for:
Answer

stage II

stages I and II

when Ep = 1

stage III

Question 22

Given a Cobb-Douglas production function estimate of Q = 1.19L.72K.18 for a given industry, this industry would have:
Answer

increasing returns to scale

constant returns to scale

decreasing returns to scale

negative returns to scale

Question 23

Which of the following is never negative?
Answer

marginal product

average product

production elasticity

marginal rate of technical substitution

slope of the isocost lines

Question 24

The primary purpose of the Cobb-Douglas power function is to:
Answer

allow one to make estimates of cost-output relationships

allow one to make predictions about a resulting increase in output for a given increase in the inputs

aid one in gaining accurate empirical values for economic variables

calculate a short-run linear total cost function

Question 25

The isoquants for inputs that are perfect substitutes for one another consist of a series of:
Answer

right angles

parallel lines

concentric circles

right triangles