Eco 550 Midterm Part 2 Latest May 2015 And Other 3 Versions Posted
ECO 550 MIDTERM PART 2. LATEST MAY 2015 AND OTHER 3 VERSIONS ANSWER POSTED AS A BONUS
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
Smoothing techniques are a form of ____ techniques which assume that there is an underlying pattern to be found in the historical values of a variable that is being forecast.
Consumer expenditure plans is an example of a forecasting method. Which of the general categories best described this example?
time-series forecasting techniques
survey techniques and opinion polling
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
Time-series forecasting models:
are useful whenever changes occur rapidly and wildly
are more effective in making long-run forecasts than short-run forecasts
are based solely on historical observations of the values of the variable being forecasted
attempt to explain the underlying causal relationships which produce the observed outcome
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:
unpredictable random factor
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
The purchasing power parity hypothesis implies that an increase in inflation in one country relative to another will over a long period of time
reduce the competitive pressure on prices
lower the value of the currency in the country with the higher inflation rate
increase foreign aid
increase the speculative demand for the currency
Trading partners should specialize in producing goods in accordance with comparative advantage, then trade and diversify in consumption because
out-of-pocket costs of production decline
free trade areas protect infant industries
economies of scale are present
manufacturers face diminishing returns
more goods are available for consumption
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
In a recession, the trade balance often improves because
service exports exceed manufactured good exports
banks sell depressed assets
fewer households can afford luxury imports
direct investment abroad declines
the capital account exceeds the current account
European Union labor costs exceed U.S. and British labor costs primarily because
worker productivity is lower in the EU
union wages are higher in the EU
layoffs and plant closings are more restrictive in the U.S. and Britain
the amount of paid time off is higher in the EU
labor-management relations are better in the EU
Using demand and supply curves for the Japanese yen based on the $/¥ price for yen, an increase in US INFLATION RATES would
Decrease the demand for yen and decrease the supply of the yen.
Increase the demand for yen and decrease the supply of the yen.
Increase the demand and increase the supply of yen.
Decrease both the supply and the demand of yen.
Have no impact on the demand or supply of the yen.
The isoquants for inputs that are perfect substitutes for one another consist of a series of:
The marginal product is defined as:
The ratio of total output to the amount of the variable input used in producing the output
The incremental change in total output that can be produced by the use of one more unit of the variable input in the production process
The percentage change in output resulting from a given percentage change in the amount
The amount of fixed cost involved
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 cant determine the firms efficiency level
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
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:
stages I and II
when Ep = 1
The marginal rate of technical substitution may be defined as all of the following except:
the rate at which one input may be substituted for another input in the production process, while total output remains constant
equal to the negative slope of the isoquant at any point on the isoquant
the rate at which all combinations of inputs have equal total costs
equal to the ratio of the marginal products of X and Y
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
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
Economies of scale exist whenever long-run average costs:
Increase as output is increased
Remain constant as output is increased
Decrease as output is increased
Decline and then rise as output is increased
The existence of diseconomies of scale (size) for the firm is hypothesized to result from:
imperfections in the labor market
imperfections in the capital markets
problems of coordination and control encountered by management
What method of inventory valuation should be used for economic decision-making problems?
current replacement cost
cost or market, whichever is lower
____ are defined as costs which are incurred regardless of the alternative action chosen in a decision-making problem.
LINK TO PART 1
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