The following linear demand specification is estimated for Conlan Enterprises, a price-setting firm:Q = a + bP +cM +dPRwhere Q is the quantity demanded of the product Conlan Enterprises sells, P is the price of that product, M is income, and PR is the price of a related product. The results of the estimation are presented below: 
For the next 2 questions suppose income remains at $10,000 but the price of the related good increases to $60 and Conlan decides to raise the price of its product to $50. At the prices and income given above, Conlan can expect to sell ________units.
A. 724
B. 872
C. 600
D. 864
E. 342
Answer: E
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A. 4%. B. -4%. C. -4.2%. D. 4.2%.
Suppose a price floor is set by the government above the market equilibrium price. Which of the following will result?
a. There will be a surplus. b. The quantity demanded will exceed the quantity supplied. c. The demand curve will shift to the left. d. None of these.
To decrease the money supply the Fed can:
A. Reduce the reserve requirement, raise the discount rate, or sell bonds. B. Raise the reserve requirement, raise the discount rate, or sell bonds. C. Raise the reserve requirement, reduce the discount rate, or buy bonds. D. Raise the reserve requirement, raise the discount rate, or buy bonds.
Assume an economy that is producing only one product. Output and price data for a three-year period are as follows. Answer the question on the basis of these data. year units of output price per unit 1 20 4 2 25 4 3 30 6 Refer to the above data. If year 2 is chosen as the base year, in years 1 and 3 the price index values, respectively, are:
a) 4 and 6. b)6 and 4. c)120 and 100. d) 100 and 150.