MBA 651 - QUIZ #2 QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
If the own price elasticity of demand is infinite in absolute value, then - Answers the demand curve is
horizontal.
Each week Bill buys exactly 7 bottles of cola regardless of its price. Bill's own price elasticity of
demand for cola in absolute value is: - Answers zero.
The demand for food (a broad group) is more - Answers inelastic than the demand for beef (specific
commodity).
The demand for good X is estimated to be Q xd = 10,000 - 4PX + 5PY + 2M + AX, where PXis the price
of X, PY is the price of good Y, M is income and AX is the amount of advertising on X. Suppose the
present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. What is the own-price
elasticity of demand for good X? - Answers -0.003.
If the price of pork chops falls from $8 to $6, and this leads to an increase in demand for apple sauce
from 100 to 140 jars, what is the cross price-elasticity of apple sauce and pork chops at a pork chop
price of $6? - Answers -.1.17.
When a demand curve is linear, - Answers demand is elastic at high prices.
The cross price elasticity of demand between goods X and Y is -3.5. If the price of X decreases by 7%,
the quantity demanded of Y will: - Answers increase by 24.5%.
A study has estimated the effect of changes in interest rates and consumer confidence on the demand
for money to be: lnM = 14.666 + .021 lnC - .036 lnr, where M denotes real money balances, C is an
index of consumer confidence, and r is the interest rate paid on bank deposits. Based on this study, a
5% increase in interest rates will cause the demand for money to: - Answers drop by .18%.
You are the manager of a popular shoe company. You know that the advertising elasticity of demand
for your product is .15. How much will you have to increase advertising in order to increase demand
by 10%? - Answers 66.7%.
Which of the following is not the important factor that affects the magnitude of the own price
elasticity of a good? - Answers supply of the good.
The demand for which of the following commodities is likely to be more inelastic? - Answers
Beverages.
The demand for video recorders has been estimated to linear and given by the demand relation Qv =
145 - 3.2Pv + 7M - .95Pf - 39Pm, where Qv is the quantity of video recorders, Pf denotes the price of
video recorder film, Pm is the price of attending a movie, Pv is the price of video recorders, and M is
income. Based on the estimated demand equation we can conclude: - Answers a and b.
The demand for women's clothing is - Answers more elastic than the demand for clothing in general.
Which of the following measures of fit penalizes a researcher for estimating many coefficients with
relatively little data? - Answers adjusted R-square.
The demand for good X is estimated to be Q xd = 10,000 - 4PX + 5PY + 2M + AX, where PXis the price
of X, PY is the price of good Y, M is income and AX is the amount of advertising on X. Suppose the
present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this
information, the cross price elasticity between goods X and Y is - Answers 0.008.
If quantity demanded for sneakers falls by 6% when price increases 20% we know that the absolute
value of the own-price elasticity of sneakers is - Answers 0.3
If quantity demanded for sneakers falls by 10% when price increases 25% we know that the absolute
value of the own-price elasticity of sneakers is: - Answers 0.4
Suppose Q xd = 10,000 - 2 Px + 3 Py - 4.5M , where Px = $100, Py = $50, and M = $2,000. What is the
own-price elasticity of demand? - Answers -.21.
Demand is perfectly elastic when the absolute value of the own price elasticity of demand is: -
Answers zero.
Which of the following is not the important factor that affects the magnitude of the own price
elasticity of a good? - Answers supply of the good.
We would expect the demand for jeans to be: - Answers more elastic than the demand for clothing
If the own price elasticity of demand is infinite in absolute value, then - Answers the demand curve is
horizontal.
Each week Bill buys exactly 7 bottles of cola regardless of its price. Bill's own price elasticity of
demand for cola in absolute value is: - Answers zero.
The demand for food (a broad group) is more - Answers inelastic than the demand for beef (specific
commodity).
The demand for good X is estimated to be Q xd = 10,000 - 4PX + 5PY + 2M + AX, where PXis the price
of X, PY is the price of good Y, M is income and AX is the amount of advertising on X. Suppose the
present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. What is the own-price
elasticity of demand for good X? - Answers -0.003.
If the price of pork chops falls from $8 to $6, and this leads to an increase in demand for apple sauce
from 100 to 140 jars, what is the cross price-elasticity of apple sauce and pork chops at a pork chop
price of $6? - Answers -.1.17.
When a demand curve is linear, - Answers demand is elastic at high prices.
The cross price elasticity of demand between goods X and Y is -3.5. If the price of X decreases by 7%,
the quantity demanded of Y will: - Answers increase by 24.5%.
A study has estimated the effect of changes in interest rates and consumer confidence on the demand
for money to be: lnM = 14.666 + .021 lnC - .036 lnr, where M denotes real money balances, C is an
index of consumer confidence, and r is the interest rate paid on bank deposits. Based on this study, a
5% increase in interest rates will cause the demand for money to: - Answers drop by .18%.
You are the manager of a popular shoe company. You know that the advertising elasticity of demand
for your product is .15. How much will you have to increase advertising in order to increase demand
by 10%? - Answers 66.7%.
Which of the following is not the important factor that affects the magnitude of the own price
elasticity of a good? - Answers supply of the good.
The demand for which of the following commodities is likely to be more inelastic? - Answers
Beverages.
The demand for video recorders has been estimated to linear and given by the demand relation Qv =
145 - 3.2Pv + 7M - .95Pf - 39Pm, where Qv is the quantity of video recorders, Pf denotes the price of
video recorder film, Pm is the price of attending a movie, Pv is the price of video recorders, and M is
income. Based on the estimated demand equation we can conclude: - Answers a and b.
The demand for women's clothing is - Answers more elastic than the demand for clothing in general.
Which of the following measures of fit penalizes a researcher for estimating many coefficients with
relatively little data? - Answers adjusted R-square.
The demand for good X is estimated to be Q xd = 10,000 - 4PX + 5PY + 2M + AX, where PXis the price
of X, PY is the price of good Y, M is income and AX is the amount of advertising on X. Suppose the
present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this
information, the cross price elasticity between goods X and Y is - Answers 0.008.
If quantity demanded for sneakers falls by 6% when price increases 20% we know that the absolute
value of the own-price elasticity of sneakers is - Answers 0.3
If quantity demanded for sneakers falls by 10% when price increases 25% we know that the absolute
value of the own-price elasticity of sneakers is: - Answers 0.4
Suppose Q xd = 10,000 - 2 Px + 3 Py - 4.5M , where Px = $100, Py = $50, and M = $2,000. What is the
own-price elasticity of demand? - Answers -.21.
Demand is perfectly elastic when the absolute value of the own price elasticity of demand is: -
Answers zero.
Which of the following is not the important factor that affects the magnitude of the own price
elasticity of a good? - Answers supply of the good.
We would expect the demand for jeans to be: - Answers more elastic than the demand for clothing
