ECONOMICS 705 - An activity level of 350 is associated with

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Question

1

For questions 1-4, use the diagram below:

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At an activity level of 100,
Select one:
a. MB < MC
b. MB - MC is maximized
c. MB > MC
d. TC > TB

Question

2

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Refer to the diagram above:
An activity level of 350 is associated with
Select one:
a. Breaking even, where total benefit equals total cost. This is the optimal choice of activity level.
b. MC > MB, and so the optimal level of the activity is therefore too low. More of the activity should be
pursued; doing so will equate MC and MB.
c. the maximum amount of total benefit, and net benefit as well.
d. Total benefit equals total cost, but the amount of the activity is too high. The optimal choice is below
the break-even point.

Module Two: Self-Assessment

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Question

3

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Refer to the diagram above:
At levels of the activity beyond 500,
Select one:
a. MC exceeds MB, but TB is still rising.
b. TB is negative immediately after A = 500.
c. There are no costs since the TC line stops before A = 400.
d. MB is negative.

Question

4

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Refer to the diagram above:
The optimal choice of activity level is approximately
Select one:
a. 200, where TB and TC are parallel.
b. It is impossible to tell in this particular graph.
c. 350, where TB and TC intersect.
d. 50, where the slopes of TB and TC are the furthest apart.

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Question

5

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Question

6

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The table below gives total output of an employee of XYZ Corporation, which produces the ever-popular
Whatzit. The "Total output" column tells you the running total of Whatzit's produced throughout the day.
Hours worked per day

Total output

5

60

6

75

7

90

8

100

9

108

10

113

The 6th hour of work yields a marginal output (MB) of
Answer:

Refer to the table above:
Which of the following statements is true about this employee's Whatzit productivity?
Select one:
a. Total output and marginal output are both increasing through 10 hours of work.
b. Total output is increasing through 10 hours of work, but marginal output decreases after the 6th hour.
c. Total output is positive but marginal output is negative.
d. Marginal output exceeds total output for hours 6 through 10.

Module Two: Self-Assessment

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Question

7

Use the following equations for the questions below:

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A = 75B - 200

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E = 900
G = 20H + 2.4H^2 - 0.01H^3
L = 15M - 850N + 0.4M^2 + 22P
dA/dB = ?
Select one:
a. 75B - 1
b. 75
c. 75B
d. -125

Question

8

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Use the above equations:
dE/dF = ?
Select one:
a. 900
b. 0
c. F^1
d. 900F

Question

9

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Use the equations above:
dG/dH = ?
Select one:
a. 20H + 4.8H + 0.03H^3
b. 20H
c. 20 + 2.4H - 0.01H^2
d. 20 + 4.8H -0.03H^2

5/22/2016 6:53 PM

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Question

10

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Use the equations above:
dL/dM = ?
Select one:
a. 15M + 0.4M^2
b. -850N + 22P
c. 15 + 0.8M
d. 15 - 850 + 0.8M + 22

5/22/2016 6:53 PM

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Question

11

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Which of the following statements about regression analysis is NOT correct?
Select one:
a. It provides estimates of the relationships between dependent and independent variables, as well as
measures of statistical fit or confidence.
b. It can be used to predict values of a dependent variable using one or more
15independent
16 i 17 variables.
18 19 2
c. With the same set of data and same choice of dependent and independentFinish
variables,
it will
attempt
... yield
different values for parameter estimates and test statistics each time a regression is run.
d. It attempts to find parameter values such that the difference between observed and predicted (or
estimated) values is minimized.

12

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You believe that variable X directly (positively) affects the value of variable Y. After running a regression, the
parameter estimate of X is +0.49 and the t-statistic is 0.03. You would thus conclude that

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Select one:

Question

a. The parameter has the expected sign but is statistically insignificant; therefore you cannot rule out the
possibility that X has no discernible effect on Y.
b. The parameter has the correct sign and is statistically significant.
c. While statistically significant, the parameter has an unexpected sign. The X variable should be discarded
from the regression model and re-run.
d. Since the t-statistic is less than the parameter value, the relationship between X and Y is actually
negative or inversely related.

13

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A low p-value for an independent variable (say, 0.04) indicates that the parameter estimate is not statistically
significant; the variable should be discarded from future regression models.

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Select one:

Question

True
False

Module Two: Self-Assessment

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14

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Assume you run a regression on two different models (sets of independent variables). The first model results
in an R^2 of 0.60 and the second model results in an R^2 of 0.64. This would mean that

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Select one:

Question

a. The second model is unambiguously better; since R^2 signifies the explanatory power of the entire
model, the second model's other results (expected signs, t-stats/p-values) are not as important. The first
model should be seen as inferior.
b. The second model has higher overall explanatory power, but whether it is a "better" model than the firs
model depends on other factors too (expected signs of the coefficients, significant t-stats/p-values, etc.).
c. The second model has better overall explanatory power, but a better R^2 is only gained at the expense
of other factors. The first model is better at explaining individual coefficient estimates than the second.
d. The independent variables in the first model are not statistically significant, despite what the t-stats
and p-values suggest.

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Question

15

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If you ran a regression using data on many different used car sales, and had selling price as the dependent
variable, the expected sign on the variable "mileage" (how many miles the car had been driven) would be
negative.
Select one:
True
False

Question

16

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If you ran a regression using data on many different used car sales, and had selling price as the dependent
variable, the expected sign on the variable "sound" (a dummy variable representing whether the car has
upgraded speakers, 1 = upgraded and 0 = standard) would be negative.
Select one:
True
False

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Information

The following are regression results where Car Price is the dependent variable:

Car Price is measured in dollars. The independent variables are:
Mileage: number of miles the car has been driven
Cylinder: number of cylinders in the engine
Liter: a more specific measure of engine size
Doors: number of doors
Cruise: dummy variable representing whether the car has cruise control (1 = cruise, 0 = no cruise)
Sound: dummy variable representing whether the car has upgraded speakers (1 = upgraded, 0 =
standard)
Leather: dummy variable representing whether the car has leather seats (1 = leather, 0 = cloth)

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This model (set of independent variables) explains approximately how much of the variation in car prices in
this dataset?

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Select one:

Question

a. 44.6%
b. 44.1%
c. 1 - 0.441 = 55.9%
d. 80.4%

Question

18

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What is true about the estimated coefficients?
Select one:
a. The "Mileage" coefficient is unexpectedly negative, since higher miles driven should be associated with
a higher selling price.
b. The "Mileage" coefficient is unexpectedly small compared to the others, suggesting that miles driven is
unimportant in the selling price of a used car.
c. The "Sound" coefficient is unexpectedly negative, suggesting that cars with upgraded speakers are
associated with a lower selling price.
d. The negative "Door" coefficient indicates that more doors on a car reduce the car's mileage.

5/22/2016 6:55 PM

Module Two: Self-Assessment

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Question

19

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https://moodle.lsus.edu/mod/quiz/attempt.php?attempt=129082&page=5

The results from the t-statistics and p-values suggests that
Select one:
a. Mileage, Liter, Doors, and Sound are all insignificant since the t-stats are negative.
b. "Liter" is the only statistically significant estimate since it's p-value is 36.4%.
c. Only the coefficient for "Liter" is statistically insignificant. All of the other coefficients are statistically
significant at the 1% level.
d. Mileage, Cylinder, Doors, Cruise, and Leather are all insignificant since the p-values are zero, meaning
unrelated to car price.

Question

20

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Which of the following statements is correct, based on the regression results above?
Select one:
a. Every additional mile driven increases the price of the car by $0.17
b. Having four doors instead of two is associated with more than a $3,000 lower price, everything else
equal.
c. Cars with cruise control have a about 6,300 fewer miles on them than cars without cruise control,
everything else equal.
d. Since the "Liter" coefficient is insignificant, the true effect is actually +787.22 and not -787.22