Question Details

The Identification Problem in the development of a demand function is a result 



1.	A price elasticity (ED) of 1.50 indicates that for a ____ increase in price, quantity demanded will ____ by ____.
a)	one percent; increase; 1.50 units
b)	one unit; increase; 1.50 units
c)	one percent; decrease; 1.50 percent
d)	one unit; decrease; 1.50 percent
e)	ten percent; increase; fifteen percent
2.	The Identification Problem in the development of a demand function is a result of:
a)	the variance of the demand elasticity
b)	the consistency of quantity demanded at any given point
c)	the negative slope of the demand function
d)	the simultaneous relationship between the demand and supply functions
e)	none of the above
3.	The estimated slope coefficient (b) of the regression equation (Ln Y = a + b Ln X) measures the ____ change in Y for a one ____ change in X.
a)	percentage, unit
b)	percentage, percent
c)	unit, unit
d)	unit, percent
e)	none of the above
4.	The type of economic indicator that can best be used for business forecasting is the:
a)	leading indicator
b)	coincident indicator
c)	lagging indicator
d)	current business inventory indicator
e)	optimism/pessimism indicator
5.	US and Canada can both grow wheat and can do mining.  Use the following table to look for which country has a comparative advantage in mining.  (Hint: Find the cost of mining in terms of wheat in each country.)
                           Absolute Cost in US 	         Absolute Cost in Canada
Wheat			              $5	                          C$8
Mining			$10			C$12
a.	Canada has a comparative advantage in mining.
b.	The US has a comparative advantage in mining.
c.	No comparative advantage in mining exists for either nation.
d.	We must first know the exchange rate to be able to answer this question.
e.	Both a and b.




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