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Ch7 - Ch7 Student 1 Demand equations derived from actual...

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Ch7 Student: ___________________________________________________________________________ 1. Demand equations derived from actual market data are A. empirical demand functions. B. never estimated using consumer interviews. C. generally estimated using regression analysis. D. both a and c E. all of the above 2. A representative sample 3. One problem with consumer interviews is that The next 5 questions refer to the following: The estimated demand for a good is = 25 - 5 P + 0.32 M + 12 P R where Q is the quantity demanded of the good, P is the price of the good, M is income, and is the price of related good R . 4. The coefficient on P 5. The good is A. an inferior good since the coefficient on is positive. B. a normal good since the coefficient on is positive. C. an inferior good since the coefficient on M is greater than one. D. a normal good since the coefficient on M is positive. E. none of the above

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6. This good and the related good R are 7. If income decreases by \$1,000, all else constant , quantity demanded will ________ by _________ units. 8. If the price of the good falls by \$4, the quantity demanded will ________ by ________ units. The next 5 questions refer to the following: The estimated demand for a good is = 4,800 - 16 P - 0.65 M - 1.5 P R where Q is the quantity demanded of the good, P is the price of the good, M is income, and is the price of related good R . 9. The coefficient on P A. violates the law of demand. B. is negative as dictated by the law of demand. C. should not be greater than one (in absolute value). D. should have the same sign as the coefficient on P R . E. both c and d
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