Econ 414 Exam 2

question

An example of a time series data set is one for which the:

answer

data would be collected for a given firm for several consecutive periods (e.g., months)

question

Emma uses a linear model to forecast quarterly same-store sales at the local garden center. The results of her multiple regression is:
Sales = 2,800 + 200T - 350D
Where T goes from 1 to 16 for each quarter of the year from the first quarter of 2006 ('06I) through the fourth quarter of 2009 ('09 IV). D is a dummy variable which is 1 if sales are in the cold and dreary first quarter, and zero otherwise, because the months of January, February, and March generate few sales at the Garden Center. Use this model to estimate sales in a store for the first quarter of 2010 in the 17th month; that is : {2010 I}. Emma's forecast should be:

answer

5,850

question

For studying demand relationships for a proposed new product that no one has ever used before, what would be the best method to use?

answer

consumer surveys, where potential customers hear about the product and are asked their opinions

question

In the first-order exponential smoothing model, the new forecast is equal to a weighted average of the old forecast and the actual value in the most recent period

answer

True

question

Mr. Geppetto uses exponential smoothing to predict revenue in his wood carving business. He uses a weight of ω = .4 for the naïve forecast and (1-ω) = .6 for the past forecast. What revenue did he predict for March using the data below? Select closet answer.

answer

106.2

question

Select the correct statement
a. Qualitative forecasts give the direction of change.
b. Quantitative forecasts give the exact amount or exact percentage change.
c. Diffusion forecasts use the proportion of the forecasts that are positive to forecast up or down.
d. Surveys are a form of qualitative forecasting.
e. all of the above are correct.

answer

e. all of the above are correct

question

The type of economic indicator that can best be used for business forecasting is the:

answer

leading indicator

question

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:

answer

cyclical variation

question

Variations in a time-series forecast can be caused by:
a. cyclical variations
b. secular trends
c. seasonal effects
d. a and b only
e. a, b, and c

answer

e. a, b, and c

question

Brewing Company experienced the following monthly sales (in thousands of barrels) during 2010:
Jan.Feb.Mar.Apr.MayJune10092112108116116
(a)Develop 2-month moving average forecasts for March through July.

answer

116

question

Brewing Company experienced the following monthly sales (in thousands of barrels) during 2010:
Jan.Feb.Mar.Apr.MayJune10092112108116116
(b)Develop 4-month moving average forecasts for May through July.

answer

113

question

Brewing Company experienced the following monthly sales (in thousands of barrels) during 2010:
Jan.Feb.Mar.Apr.MayJune10092112108116116
(c)Develop forecasts for February through July using the exponential smoothing method (with w = .5). Begin by assuming . Yt+1= Yt

answer

113.5

question

Concerning the maximization of output subject to a cost constraint, which of the following statements (if any) are true?

answer

all of the above

question

Fill in the missing data to solve this problem.
Variable InputTotal ProductAverage ProductMarginal Product4?70---5??406350??
What is the total product for 5 units of input, and what is the marginal product for 6 units of input

answer

320 and 30

question

Given a Cobb-Douglas production function estimate of for a given industry, this industry would have:
Hint: read Lecture slides - Page 30

answer

decreasing returns to scale

question

Holding the total output constant, the rate at which one input X may be substituted for another input Y in a production process is:

answer

all of the above

question

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?

answer

the firm should use relatively more labor

question

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:

answer

stage III

question

In a relationship among total, average and marginal products, where TP is maximized:

answer

MP is equal to zero

question

In the Cobb-Douglas production function :

answer

if the amount of labor input (L) is increased by 1 percent, the output will increase by β1 percent

question

The law of diminishing marginal returns:

answer

none of the above

question

Economists at the Wilson Company are interested in developing a production function for fertilizer plants. They collected data on 13 different plants that product fertilizer. See the following table:
Suppose that the production function is given by Cobb-Douglas production function Q = aLb1 Kb2 .
1) Estimate the Cobb-Douglas production function
hint: Watch the video posted on BB ( Weekly Study Materials - Week #7)

answer

In Q = − 4.81 + 0.397 ln K + 1.112 ln L

question

2) Determine the percentage increase in output if labor input is increased by 10% (assuming that capital input is held constant)

answer

11.12%

question

3)Determine the percentage increase in output if both labor and capital are increased by 20%.

answer

30.18%

question

A cottage industry exists in the home-manufacture of 'country crafts'. Especially treasured are handmade quilts. If the fourth completed quilt took 30 hours to make, and the eighth quilt took 28 hours, what is the percentage learning?

answer

6.7%

question

According to the theory of cost, specialization in the use of variable resources in the short-run results initially in:

answer

increasing returns and declining average marginal costs

question

Economies of Scope refers to situations where per unit costs are:

answer

reduced when two or more products are produced

question

Economies of scale exist whenever long-run average costs:

answer

decrease as output is increased

question

For a short-run cost function which of the following statements is (are) not true?

answer

The marginal cost function intersects the average fixed cost function where the average variable cost function is a minimum

question

If TC = 321 + 55Q -5Q^2, then average total cost at Q=10 is:

answer

37.1

question

Possible sources of economies of scale (size) within a production plant include:

answer

specialization in the use of capital and labor

question

Suppose that total cost is given by TC = 200 + 5Q -0.4Q^2 + 0.001Q^3

answer

all of the above are correct

question

The cost function is:

answer

a schedule or mathematical relationship showing the total cost of producing various quantities of output

question

The existence of diseconomies of scale (size) for the firm is hypothesized to result from:

answer

problems of coordination and control encountered by management

question

Which of the following statements about cost functions is true?

answer

The shape of the firm's long-run cost function is important in decisions to expand the scale of operations

question

A linear total cost function implies that:
a. marginal costs are constant as output increases
b. average total costs are continually decreasing as output increases
c. a and b
d. none of the above

answer

c. a and b

question

George Webb Restaurant collects on the average $5 per customer at its breakfast & lunch diner. Its variable cost per customer averages $3, and its annual fixed cost is $40,000. If George Webb wants to make a profit of $20,000 per year at the diner, it will have to serve__________ cus-tomers per year.

answer

20,000 customers

question

In a study of banking by asset size over time, we can find which asset sizes are tending to become more prominent. The size that is becoming more predominant is presumed to be least cost. This is called:

answer

survivorship analysis

question

In the linear breakeven model, the breakeven sales volume (in dollars) is equal to fixed costs divided by:

answer

one minus the variable cost ratio

question

In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as:

answer

contribution margin per unit

question

Offshore Petroleum's fixed costs are $2,500,000 . Selling price per barrel of oil is $18 and variable costs per barrel are $10.

answer

5,625,000

question

The short-run cost function is:

answer

relevant to decisions in which one or more inputs to the production process are fixed

question

Theoretically, in a long-run cost function:

answer

all inputs are considered variable

question

What is another term meaning the degree of operating leverage?

answer

all of the above

1 of 44

question

An example of a time series data set is one for which the:

answer

data would be collected for a given firm for several consecutive periods (e.g., months)

question

answer

5,850

question

For studying demand relationships for a proposed new product that no one has ever used before, what would be the best method to use?

answer

consumer surveys, where potential customers hear about the product and are asked their opinions

question

In the first-order exponential smoothing model, the new forecast is equal to a weighted average of the old forecast and the actual value in the most recent period

answer

True

question

answer

106.2

question

answer

e. all of the above are correct

question

The type of economic indicator that can best be used for business forecasting is the:

answer

leading indicator

question

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:

answer

cyclical variation

question

Variations in a time-series forecast can be caused by:
a. cyclical variations
b. secular trends
c. seasonal effects
d. a and b only
e. a, b, and c

answer

e. a, b, and c

question

answer

116

question

answer

113

question

answer

113.5

question

Concerning the maximization of output subject to a cost constraint, which of the following statements (if any) are true?

answer

all of the above

question

answer

320 and 30

question

Given a Cobb-Douglas production function estimate of for a given industry, this industry would have:
Hint: read Lecture slides - Page 30

answer

decreasing returns to scale

question

Holding the total output constant, the rate at which one input X may be substituted for another input Y in a production process is:

answer

all of the above

question

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?

answer

the firm should use relatively more labor

question

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:

answer

stage III

question

In a relationship among total, average and marginal products, where TP is maximized:

answer

MP is equal to zero

question

In the Cobb-Douglas production function :

answer

if the amount of labor input (L) is increased by 1 percent, the output will increase by β1 percent

question

The law of diminishing marginal returns:

answer

none of the above

question

answer

In Q = − 4.81 + 0.397 ln K + 1.112 ln L

question

2) Determine the percentage increase in output if labor input is increased by 10% (assuming that capital input is held constant)

answer

11.12%

question

3)Determine the percentage increase in output if both labor and capital are increased by 20%.

answer

30.18%

question

answer

6.7%

question

According to the theory of cost, specialization in the use of variable resources in the short-run results initially in:

answer

increasing returns and declining average marginal costs

question

Economies of Scope refers to situations where per unit costs are:

answer

reduced when two or more products are produced

question

Economies of scale exist whenever long-run average costs:

answer

decrease as output is increased

question

For a short-run cost function which of the following statements is (are) not true?

answer

The marginal cost function intersects the average fixed cost function where the average variable cost function is a minimum

question

If TC = 321 + 55Q -5Q^2, then average total cost at Q=10 is:

answer

37.1

question

Possible sources of economies of scale (size) within a production plant include:

answer

specialization in the use of capital and labor

question

Suppose that total cost is given by TC = 200 + 5Q -0.4Q^2 + 0.001Q^3

answer

all of the above are correct

question

The cost function is:

answer

a schedule or mathematical relationship showing the total cost of producing various quantities of output

question

The existence of diseconomies of scale (size) for the firm is hypothesized to result from:

answer

problems of coordination and control encountered by management

question

Which of the following statements about cost functions is true?

answer

The shape of the firm's long-run cost function is important in decisions to expand the scale of operations

question

A linear total cost function implies that:
a. marginal costs are constant as output increases
b. average total costs are continually decreasing as output increases
c. a and b
d. none of the above

answer

c. a and b

question

answer

20,000 customers

question

answer

survivorship analysis

question

In the linear breakeven model, the breakeven sales volume (in dollars) is equal to fixed costs divided by:

answer

one minus the variable cost ratio

question

In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as:

answer

contribution margin per unit

question

Offshore Petroleum's fixed costs are $2,500,000 . Selling price per barrel of oil is $18 and variable costs per barrel are $10.

answer

5,625,000

question

The short-run cost function is:

answer

relevant to decisions in which one or more inputs to the production process are fixed

question

Theoretically, in a long-run cost function:

answer

all inputs are considered variable

question

What is another term meaning the degree of operating leverage?

answer

all of the above

Continue to order Get a quote

Econ 414 Exam 2

Recent Posts

Recent Comments

Calculate the price of your order

Our guarantees

Money-back guarantee

Zero-plagiarism guarantee

Free-revision policy

Privacy policy

Fair-cooperation guarantee