UNIT III MANAGERIAL ECONOMICS Question 1 : R2 is a statistical measure which Answer determines how important one variable is in explaining

g the value of another variable. tests the true value of a variable. determines how well an equation can estimate the relationship between one variable and a set of other variables. All of the above. Question 2 : The sensitivity of the change in quantity demanded to a change in price is called Answer income elasticity. cross-elasticity. price elasticity of demand. coefficient of elasticity. Question 3 : The government unit that wants to achieve "revenue enhancement" will find it considerably more favorable to enact an excise tax on products whose demand is Answer highly elastic. relatively elastic. highly inelastic. unitary elastic. Question 4 : The sensitivity of the change in quantity consumed of one product to a change in the price of a related product is called Answer cross-elasticity. substitute elasticity. complementary elasticity. price elasticity of demand. Question 5 : Two goods are ________ if the quantity consumed of one increases when the price of the other decreases. Answer normal superior complementary substitute Question 6 : Two products are ________ if the quantity consumed of one increases when the price of the other increases. Answer normal inferior complementary substitutes

Question 7 : The use of a dummy variable in regression analysis Answer indicates that a researcher does not really know what to include in the equation. indicates that a variable is expected to either have or not have an impact on a dependent variable. indicates that insufficient data is available for the analysis. indicates the use of hypothetical data. Question 8 : A tax that is imposed as a specific amount per unit of a product is a(n) Answer excise or specific tax. sales or ad valorem tax. compound duty. income tax. Question 9 : When total revenue increases from $18,000 to $26,000 when quantity increases from eight to ten, marginal revenue is equal to Answer $3,000. $4,000. $8,000. $2,600. Question 10 : The demand for items that go into the production of a final product is called Answer marginal demand. aggregate demand. partial demand. derived demand. Question 11 : Briefly explain the meaning of the F-test. Why do you think this test is considered to be more important in multiple regression analysis than it is in simple regression analysis? 30 points Answer
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Question 12 : Hypothetically, the global recession caused significant reduction in your income. What would you expect to happen to spending on food at home and spending on food in restaurants resulting from such economic phenomenon? How would income elasticity of demand help explain these changes? How would income elasticity of demand help explain these changes? Answer
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