ECO323Y5 Lecture : Early Industrialization
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37.Use the following setup for the next question.
A manufacturing firm is deciding whether or not to invest in a new printer that needs an initial investment of $150,000. The investment would increase cash flows in the first year by $80,000 and in the second year by $75,000.
?If the interest rate is 10% then the net present value of the investment is
?a. $5,000 
b. ? $9,091 
?c. $15,290 
d.  ?$21,901 33. Table 1316

Question 1
Which of the following approaches to understanding and predicting consumer behavior depends primarily on the knowledge and experience of a firm's employees and its suppliers?
Test marketing and price experiments  
Analysis of historical data.  
Direct consumer surveys.  
Expert opinion. 
Question 2
In which of the following situations would reliance on expert opinion as a basis for a managerial decision be most preferred?
When the product being marketed is relatively new.  
When the level of economic activity can have a significant effect on the demand for the firm's output.  
When the product can be packaged with a variety of price and quality combinations.  
When the business in question serves as a supplier of inputs to other businesses, especially in multiproduct situations where other strategies may be prohibitively expensive. 
Question 3
The approach to analyzing consumer behavior that asks consumers to rank and choose among different product attributes to reveal their relative valuation of different characteristics is called:
conjoint analysis.  
contingent valuation.  
the hedonic estimation technique.  
a direct consumer survey. 
Question 4
All of the following are limitations of direct consumer surveys except:
the possibility of response biases because survey respondents may not want to reveal their true preferences.  
the possibility that the type of questions asked may unintentionally bias the respondent's answers.  
the likelihood that respondents will deliberately and systematically mislead interviewers.  
the possibility that consumers' responses may not reflect their actual behavior in the market place. 
Question 5
Which of the following approaches to understanding and predicting consumer behavior does not actually solicit any information from potential customers?
Expert opinion.  
Test marketing.  
Analysis of historical data.  
Conjoint analysis. 
Question 6
Data collected on a sample of individuals with different characteristics at a specific point in time are called:
panel data.  
crosssection data.  
time series data.  
none of the above. 
Question 7
Which of the following approaches to understanding and predicting consumer behavior provides the most insight into how consumers can be expected to respond in an actual market setting?
Test marketing.  
Conjoint analysis.  
Expert opinion.  
Analysis of historical data. 
Question 8
An approach to analyzing consumer behavior in which consumer reaction to different prices is analyzed in a laboratory situation or a test market is called:
nonprice experiments.  
focus groups.  
price experiments.  
none of the above. 
Question 9
Data collected on the same observation unit at a number of points in time are called:
panel data.  
time series data.  
crosssection data.  
none of the above. 
Question 10
A measure of how much the coefficient would vary in regressions based on different samples is called:
Fstatistic.  
standard error of the estimated coefficient.  
tstatistic.  
partial Fstatistic. 
Question 11
The test statistic used to test the hypothesis of whether a regression coefficient is significantly different from zero, holding all other independent variables constant, is called a(n):
ttest.  
Ftest.  
multicollinearity test.  
autocorrelation test. 
Question 12
Regression analysis that analyzes the relationship between one dependent variable and several independent variables is called:
cluster analysis.  
correlation analysis.  
multiple regression analysis.  
simple regression analysis. 
Question 13
The ratio of the regression coefficient to its standard error is called:
Fstatistic.  
tstatistic.  
coefficient of determination.  
partial Fstatistic. 
Question 14
The coefficient of determination will range between what values?
1 and +1  
0 and 1  
3 and +3  
none of the above 
Question 15
The range of values in which we can be confident that the true regression coefficient lies within a given degree of probability is called a:
confidence interval.  
logistic regression.  
prediction interval.  
none of the above. 
Question 16
The estimated regression equation is Y = 10 + 2.5X, if X =0 than the predicted value of Y is equal to
2.5  
7.5  
12.5  
10 
TABLE 66 Stock Prices and Consumer Prices  
CITY  
Y = Rate of Change, Stock Prices, Percent Per Year  
X = Rate of Change, Consumer Prices, Percent Per Year  
CITY  Y  X  
A  5  4.3  
B  11.1  4.6  
C  3.2  2.4  
D  7.9  2.4  
E  25.5  26.4  
F  3.8  4.2  
G  11.1  5.5  
H  9.9  4.7  
I  3.3  2.2  
J  1.5  4  
K  6.4  4  
L  8.9  8.4  
M  8.1  3.3  
N  13.5  4.7  
O  4.7  5.2  
P  7.5  3.6  
Q  4.73.  6  
R  8  4  
S  7.5  3.9  
T  9  2.1 
Table 66 gives data on percent change per year stock prices (Y) and consumer prices (X) for a cross section of 20 cities.
******************* answer in "SAS format" please********************* (if possible)
1) Plot the data in scattergram
2) Regress Y on X and examine the residuals from this regression. What do you observe?
3) Since the data for city(E) is unusual, repeat the regression in (2) dropping the data on city(E). Now examine the residuals from this regression. What do you observe?
4) If on the basis of the results in (2) you conclude that there was heteroscedasticity in the error variance but on the basis of the results in (3) you reverse your conclusion, what general conclusions do you draw?
State whether the following statements are true or false. Breifly justify your answer:
5) When autocorrelation is present, OLS estimators are biased as well as inefficient;
6) The R squared values of two models, one involving regression in the firstdifference form and another in the level form, are not directly comparable.
7) In the presence of heterscedasticity the usual OLS method always overestimates the standard errors of estimators.
8) If a regression model is misspecified (e.g., an important variable is ommitted), the OLS residuals will show a distinct pattern.