What would be implied by a very large standard error on the price coefficient in
ID: 1123406 • Letter: W
Question
What would be implied by a very large standard error on the price coefficient in a demand estimation regression?
A) The regression fits the data very well.
B) Price sensitivity (and therefore price elasticity) is estimated very imprecisely.
C) Price sensitivity ( and therefore price elasticity) is estimated very precisely
D) The regression fits the data very poorly.
In regression, what is a residual?
A) The difference between a depended variable's actual value for an observation and its average value
B) A coefficient estimate divided by the standard error
C) the difference between a depended variable's actual value and what the regression line predicts
D) an explanatory variable that is an exact multiple of another variable in the regression model
Which of the following statements is not true?
A) lower total fixed costs leads to higher production quantities
B) For a firm that does not shutdown , profits are maximized when marginal costs equals marginal revenue
C) Total fixed costs equal total costs minus total variable costs
D) The costs of inputs which are impossible to adjust in the short run can be a source of fixed costs
In which of the following would a profit-maximizing firm shutdown?
A) At the quantity where marginal revenue equal marginal costs, marginal revenue is less than average variable cost
B) At the quantity where marginal costs is minimized, marginal revenue is less than average total cost
C) Marginal revenue is less than average total cost at all quantities
D) Total fixed cost is greater than total revenue at all quantities
Microsoft licenses its office suite at prices above marginal cost. Which of the following would decrease Microsoft's ability to maintain positive margins?
A) a decision to create "Home", "plus", and "pro" versions of the software for different audiences
B) a increase in the quality of competing office suites, so that they become closer substitutes
C) an influx skilled programmers leads to a decrease in the fixed costs of production
D) users become less price sensitive as software budgets increase in a recovery from a recession
In which of the following would equilibrium prices be higher than marginal cost?
A) when the market supply curve is inelastic
B) when the firm has no fixed costs
C) when the firm specific demand curve
D) when several perfect substitutes are available
A firm operates in a perfectly competitive industry. Suppose it has a short run total cost function given by TC=10000+0.04q^2. If the market price is 56. What is the firm's profit-maximizing quantity?
Suppose an investment has three possible outcomes. There is a 25% chance that it brings a profit of 4,000,000. There is a 70% chance that it brings a profit of 1,000,000. There is a 5% chance that it brings a profit of 0. Suppose a decision makers utility function can be described by U(w)=w^0.5. What is this investments certainty equivalence for this decision maker?
Explanation / Answer
1) The answer is B-) Price sensitivity (and therefore price elasticity) is estimated very imprecisely.
because , standard error tells us the average distance of our observed variable from the regression line. if the standard error is less, then the observed variables are close to fitted line and if it is large, then the observed variable is far from fitted line. so, if the standard error is very large in price coefficient , then the regression fits the data very poor from the price coeffiecient.
2) THe answer is C) the difference between a depended variable's actual value and what the regression line predicts.
becasue , a residual is the difference between the observed value of the dependent variable and the predicted value .
3) PLease upload it again. it against chegg policy. chegg policy to answer only 1 question.
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