Calculate t-statistics for each variable and explain what this tells you
What will be an ideal response?
Price: -10/2.29 = -4.37
Advertising: 5/1.36 = 3.86
Competitor's price: 4/1.75 = 2.29
Income: 0.05/1.5 = 0.33
All variables are statistically significant with the exception of income. Thus we can conclude that the other variables do have an impact on the quantity demanded of this good.
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Refer to the market diagram. Relative to the surplus they would receive in a competitive market, consumers lose how much surplus because there is a monopoly?
The following questions refer to the accompanying market diagram. PC and QC are the equilibrium price and quantity if the firm behaves competitively, and PM and QM are the equilibrium price and quantity if the firm is a simple monopoly.
a. Area F + G + H
b. Area C + D + E
c. Area E + H
d. Area A + B
George is considering buying shares of Intel. If the company does well, he will gain $100, but if the company does poorly, he will lose $100
George is risk averse, so for George the magnitude of the pain of losing $100 will ________ the pleasure of gaining $100. A) equal B) be less than C) be greater than D) None of the above answers are correct because we cannot compare the pain of losing to the pleasure of gaining.
Under fixed exchange rates, domestic asset transactions by the central bank
A) can be used to alter the level of foreign reserves but not to affect the state of employment and output. B) cannot be used to alter the level of foreign reserves but only to affect the state of employment and output. C) can be used to alter the level of foreign reserves and to affect the state of employment and output. D) can be used to alter the domestic money supply and the level of foreign reserves. E) can raise output to full-employment level.
When a few rival groups spend money in competition for a license that grants them a monopoly for the provision of cable TV for an area, economists label this activity
A. perfect competition. B. oligopoly. C. monopolistic competition. D. rent seeking.