ch04 - File: Ch04; CHAPTER 4: Estimating and Forecasting...

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Unformatted text preview: File: Ch04; CHAPTER 4: Estimating and Forecasting Demand Each question contains a code showing the section of the chapter text from which it was taken. The codes for this chapter are: Code Section 1 Collecting Data 2 Regression Analysis 3 Interpreting Regression Statistics 4 Forecasting MULTIPLE CHOICE 1. Which of the following can one expect to get from a sound forecast? a) A precise numerical forecast (one with a minimal margin of error). b) The relationship between the forecast and the economic variables that influence it. c) An assessment of the accuracy of the forecast. d) A numerical estimate based on extending the past time trend into the future. e) Answers b and c are both correct. ANSWER: e SECTION: 1 2. Response bias occurs when a) Responses do not reflect the true preferences and attitudes of respondents. b) Insufficient sample size tends to bias the cross-section of responses. c) Questions are framed in ways that biases the answers. d) Different question versions are targeted to different segments of respondents. e) Answers b and c are both correct. ANSWER: a SECTION: 1 3. Is it always worthwhile gathering more information about customer needs and preferences? a) Yes, such information is highly valuable. b) Yes, provided that this information is relevant to the firm’s decisions. c) No, a good rule of thumb is not to spend on information more than 2% of what is at stake in the decision. d) No, the value of additional information must be compared to its additional cost. e) None of the answers above is correct. ANSWER: d SECTION: 1 4-1 Estimating and Forecasting Demand 4. Which of the following is the best definition of a controlled market study? a) A carefully designed study of a market situation. b) A study of a single market. c) A study that varies key economic variables in one or more markets to determine the effects of the changes. d) A study that assumes differences in sales can be accounted for by unmeasured variables. e) A study that uses experiments to determine probable market outcomes. ANSWER: c SECTION: 1 5. If a study examines several different markets at the same time, and compares outcomes with conditions in each market, the study is using a) Time series data. b) Survey data. c) Controlled data. d) Experimental data. e) Cross-sectional data. ANSWER: e SECTION: 1 6. Can a researcher, in analyzing a market, use uncontrolled market data? a) Yes, it is valuable and useful data as is. b) Yes, by using appropriate statistical techniques. c) No, uncontrolled market data has little information value. d) Uncertain, it depends on how “noisy” the data is. e) No, valid causal predictions must be based on controlled data. ANSWER: b SECTION: 1 7. In estimating a regression equation, a) The main objective is to determine whether there is a valid correlation between two variables....
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This note was uploaded on 03/11/2012 for the course ECON 333 taught by Professor Barkley during the Fall '08 term at CSU Fullerton.

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ch04 - File: Ch04; CHAPTER 4: Estimating and Forecasting...

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