SECOND EXAM KEY
FALL 1993
MANAGERIAL ECONOMICS
MULTIPLE CHOICE QUESTIONS (50 pts, 2pts each)
1.
To solve any system of economic relations, the number of unknown variables must:
>
A.
not exceed the number of equations.
B.
exceed the number of equations.
C.
equal the number of equations.
D.
be less than the number of equations.
2.
A demand curve shows the relation between the price charged for a product and the quantity demanded, holding constant:
A.
the effects of all other variables in the supply function
B.
the quantity demanded.
>
C.
the effects of all other variables in the demand function.
D.
"own" price.
3.
Historical price/quantity data reveal a demand curve when:
A.
supply conditions are constant, but demand is shifting over time.
>
B.
demand conditions are constant, but supply is shifting over time.
C.
both supply and demand curves are shifting over time,
D.
they reflect the interplay between the quantity supplied by producers and the quantity demanded by customers.
4.
In a linear demand function:
>
A.
the marginal effect of each independent variable is constant.
B.
each coefficient estimate measures the marginal change in
X
following a oneunit change in
Y
.
C.
a changing absolute effect on the
Y
variable is caused by changes in
X
.
D.
the elasticity of Y with respect to X is constant.
5.
A multiplicative model is used when:
A.
coefficients can be interpreted as estimates of the elasticity of
X
with respect to
Y
.
>
B.
the marginal effect of each independent variable depends on the value of all independent variables.
C.
the percentage change in
Y
due to a 1 percent change in
X
does not depend upon the size of
X
.
D.
the least squares technique is inappropriate.
6.
The delphi method:
A.
assumes that several experts arrive at forecasts that are inferior to those that individuals generate.
B.
employs interaction among experts in the hope that resulting forecasts embody all available objective and subjective information.
C.
can be influenced by the forceful personality of one or a few key experts.
>
D.
employs an independent party to elicit a consensus opinion.
7.
A secular trend is the:
A.
rhythmic variation in economic series that is due to expansion or contraction in the overall economy.
B.
annual pattern in sales or profits caused by weather, habit, or social custom.
C.
predictable shock to the pace of economic activity caused by wars, strikes, natural catastrophes, and so on.
>
D.
longrun pattern of increase or decrease in a series of economic data.
8.
Linear trend analysis assumes:
A.
constant percentage change in an important economic variable over time.
>
B.
constant unit change in an important economic variable over time.
C.
arithmetic dollar growth.
D.
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 Spring '11
 smith
 Economics, minimum efficient scale, Kanata, important economic variable

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