Questions:
Question 1
An example of a time series data set is one for which the:
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:
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?
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:
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:
secular trend
cyclical variation
seasonal effect
unpredictable random factor
Question 6
If two alternative economic models are offered, other things equal, we would
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:
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
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?
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?
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
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:
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
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?
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:
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:
10.2
102
37.1
371
321
Question 17
Economies of Scope refers to situations where per unit costs are:
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?
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:
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?
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:
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:
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?
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:
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:
right angles
parallel lines
concentric circles
right triangles