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ECON 102 Quiz: ECON 102 UW Madison Quiz0Summer2018withSolutions

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turquoisegnu128
31 Jan 2019
School
UW-Madison
Department
Economics
Course
ECON 102
Professor
All

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Document Summary

Write the y-intercept form of the equation that contains these two points. Answer: slope = rise/run = (change in y)/(change in x) = (50 20)/(40 10) = 30/30 = 1 general form of the equation: y = mx + b. Y = x + b use one of the known points to find the value of "b": Y = x + 10: (2 points) you are told that the initial straight line contains the two points (x, y) = (6, 7) and (10, 5). The new line is related to this first line: for every y value the new x value is 5 units bigger. Show all your work to get full credit. Method i: first we need to get the equation for the first line. Slope of this first line = (7 5)/(6 : = (2)/(-4) = -1/2. Then use a known point to find the y-intercept: Equation for first line: y = 10 (1/2)x.

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Related Questions

ECON 3050

Q24. The coefficient of determination (r2) is calculated as 0.49, then the correlation coefficient:

Cannot be determined without the data

Should be - 0.70 or 0.70

Should be 0.

Neither of the above

Q25. A regression line is used for all of the following except one. Which one is not a valid use of a regression line?

To estimate the average value of Y at a specified value of X.

To predict the value of Y for an individual, given that individual's X-value.

To estimate the change in Y for a one-unit change in X.

To determine if a change in X causes a change in Y.

Q26. Which choice is not an appropriate description of Yˆ in a regression equation?

Estimated response

Predicted response

Estimated average response

Observed response

Q27. Which of the following is the best way to determine whether or not there is a statistically significant linear relationship between two quantitative variables?

Compute a regression line from a sample and see if the sample slope is 0.

Compute the correlation coefficient and see if it is greater than 0.5 or less than −0.5.

Conduct a test of the null hypothesis that the population slope is 0.

Conduct a test of the null hypothesis that the population intercept is 0.

Q28. There is no relationship between variables unless the data points lie in a straight line.

True

False

Q29. The sample regression analysis

Is the same as the population regression line

Is used to estimate the population regression line

Shows the true relation between dependent and independent variables

None of the above.

Q30. In regression, a dependent variable is sometimes called a predictor variable.

True

False

Q31. In a linear regression equation of the form y = a + bx, the intercept shows

The amount that y changes when x changes by one unit

The amount that x changes when y changes by one unit

The value of y when x is zero

The value of x when y is zero.

Q32. In a linear regression equation of y = a + bx, the slope b shows

Y / b

X / b

Y / X

X / Y

1.Dr. Claw is hatching a plan to steal all of the cherry blossoms in Japan, cornering the market on haiku inspiration. He likes his henchmen to be big, fast, and obedient. Lou the Lunk weighs 340 pounds, runs slowly, and is somewhat obedient. Turncoat Tom weighs 240 pounds, runs very fast, and is very disobedient. Brainwashed Bobby weighs 150 pounds, has average speed, and is extremely obedient.

(a) Suppose Dr. Claw prefers henchman A to henchman B if A is superior to B in at least two of these dimensions, otherwise he is indifferent. Are Dr. Claw’s preferences complete? Are they transitive? Explain your answer.

(b) Now suppose Dr. Claw only prefers henchman A to henchman B if A is superior to B in all three dimensions. If A and B are identical in all three traits, then he is indifferent. Otherwise, Dr. Claw cannot compare the two henchmen. Are Dr. Claw’s preferences complete in this case? Are they transitive? Explain.

2. In this exercise, I will show you how to plot some indifference curves for the utility function u(x, y) = xy. Carefully read and follow these steps.

(a) For each of the values x = 1, 2, 3, 4, 5, find the corresponding value of y such that u(x, y) = 5. Plot these points on a graph of the x, y coordinate plane.

(b) Find the formula for the slope of the indifference curve passing through any point (x, y). Calculate these slopes for each point from part (a).

(c) Plot the slopes from part (b) on the same graph by drawing a short line segment at each point with its corresponding slope. For example, at (1, y1), draw a small line segment with the slope of the indifference curve through (1, y1).

(d) On the same graph, approximate the indifference curve corresponding to u(x, y) = 5 by sketching a curve that passes through each of the plotted points from (a), matching the slope of the line segments from (c) at each point.

(e) Repeat parts (a)-(d), but now for u(x, y) = 10, using the same graph.

Suppose that the extended (generalized) demand function for good Y is:

QdY= 250,000 - 500 PY -1.5 M + 240 PX

where: QdY = quantity demanded of good Y

PY = Price of good Y

M = Average income of consumers

PX = Price of related good X

a) If M = $ 60,000 and PX = $100, what is the reduced demand function for good Y?

b) Continue using the reduced demand equation from part a,

If M = $60,000, PX = $100, and PY = $200 then QdY = ________

If M = $60,000, PX = $100, and PY = $300 then QdY = ________

Use this information (prices and quantities demanded of good Y) to calculate the price elasticity of demand between these two points on the demand curve of good Y. Show your work.

c) Use your answer to part b. Between these two points on the demand for good Y, is demand elastic, inelastic, or unitary price elastic? Why? What will happen to total revenues if the price increases between these two points on the demand curve?

d) In part b, you found that when:

M = $60,000, PX = $100, and PY = $200 then QdY = ________

Now let's suppose that the price of the related good X decreases from $100 to $50 but income remains constant (at $60,000). Assume that the price of good Y is also constant at $200.

If M = $60,000, PX = $50, and PY = $200 then QdY = ________

Use these prices of good X and the quantities demanded of good Y to calculate the cross-price elasticity of the demand for good Y when the price of good X decreases from $100 to $50.

e) Consider your answer to part d. Based on the value of the cross-price elasticity of demand you just estimated, are goods X and Y substitutes, complements, or unrelated? Why?

f) In part b, you found that when:

M = $60,000, PX = $100, and PY = $200 then QdY = ________

Now let's suppose that consumer income increases from $60,000 to $80,000 but the price of good X remains constant (at $100). Assume that the price of good Y is also constant at $200.

If M = 80,000 , PX = $100 and PY = $200 then QdY = _________

Use these income levels and quantities demanded of good Y to calculate the income elasticity of the demand for good Y when income increases from $60,000 to $80,000.

Show your work

g) Consider your answer to part f. Based on the value of the income elasticity of demand you just estimated, is good Y normal, inferior, or income independent?