Econ Week 3

Front 1

Time-series forecasting models:

a. are useful whenever changes occur rapidly and wildly

b. are more effective in making long-run forecasts than short-run forecasts

c. are based solely on historical observations of the values of the variable being forecasted

d. attempt to explain the underlying causal relationships which produce the observed outcome

e. none of the above

Back 1

c. are based solely on historical observations of the values of the variable being forecasted

Front 2

The forecasting technique which attempts to forecast short-run changes and makes use of economic indicators known as leading, coincident or lagging indicators is known as:

a. econometric technique

b. time-series forecasting

c. opinion polling

d. barometric technique

e. judgment forecasting

Back 2

d. barometric technique

Front 3

The use of quarterly data to develop the forecasting model Y1=a+bYt-1 is an example of which forecasting technique?

a. barometric forecasting

b. time-series forecasting

c. survey and opinion

d. economic methods based on an understanding of the underlying economic variables involved

e. input-output analysis

Back 3

b. time-series forecasting

Front 4

Variations in a time-series forecast can be caused by:

a. cyclical variations

b. secular trends

c. seasonal effects

d. a and b only

e. a b and c

Back 4

e. a b and c

Front 5

The variation in an economic time-series which is caused by major expansions or contractions usually of greater than a year in duration is known as:

a. secular trend

b. cyclical variation

c. seasonal effect

d. unpredictable random factor

e. none of the above

Back 5

b. cyclical variation

Front 6

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

Back 6

a. leading indicator

Front 7

Consumer expenditure plans is an example of a forecasting method. Which of the general categories best described this example?

a. time-series forecasting techniques

b. barometric techniques

c. survey techniques and opinion polling

d. econometric techniques

e. input-output analysis

Back 7

c. survey techniques and opinion polling

Front 8

Int he first order exponential smoothing model, the new forecast is equal to a weighted average of the old forecast and the actual value in the most recent period.

a. true

b. false

Back 8

a. true

Front 9

Simplified trend models are generally appropriate for predicting the turning points in an economic time series.

a. true

b. false

Back 9

b. false

Front 10

Smoothing techniques are a form of ___ techniques which assume that there is an underlying pattern to be fund in the historical values of a variable that is being forecast.

a. opinion polling

b. barometric forecasting

c. econometric forecasting

d. time-series forecasting

e. none of the above

Back 10

d. time-series forecasting

Front 11

Seasonal variations can be incorporated into a time-series model in a number of different ways, including:

a. ratio-to-trend method

b. use of dummy variables

c. root mean squared error method

d. a and b only

e. a b and c

Back 11

d. a and b only

Front 12

For studying demand relationships for a proposed new product that one one has ever used before, what would be the best method to use?

a. ordinary least squares regression on historical data

b. market experiments where the price is set differently in two markets

c. consumer surveys where potential customers hear about the product and are asked their opinions

d. double log functional form regression model

e. all of the above are equally useful in this case

Back 12

c. consumer surveys where potential customers hear about the product and are asked their opinions

Front 13

Which of the following barometric indicators would be the most helpful for forecasting future sales for an industry?

a. lagging economic indicators

b. leading economic indicators

c. coincident economic indicators

d. wishful thinking

e. none of the above

Back 13

b. leading economic indicators

Front 14

An example of a time series data set is one for which the:

a. data would be collected for a given firm for several consecutive periods (eg months)

b. data would be collected for several different firms at a single point in time

c. regression analysis comes from data randomly taken from different points in time.

d. data is created from a random number generation program

e. use of regression analysis would impossible in time series

Back 14

a. data would be collected for a given firm for several consecutive periods (eg months)

Front 15

Problem with graph sales/time that is scattered

It is likely that the best forecasting method for this plot would be:

a. a two period moving average

b. a secular trend upward

c. a seasonal pattern that can be modeled using dummy variables or seasonal adjustments

d. a semi log regression model

e. a cubic functional form

Back 15

c. a seasonal pattern that can be modeled using dummy variables or seasonal adjustments

Front 16

What's true about both the short run and long run in terms of production and cost analysis?

a. In the short-run, one or more of the resources are fixed

b. In the long-run, all the factors are variable

c. The time horizon determines whether or not an input variable is fixed or not

d. The law of diminishing returns is based in part on some factors of production being fixed, as they are in the the short-run

e. all of the above

Back 16

e. all of the above

Front 17

The marginal product is defined as:

a. the ratio of total output to the amount of the variable input used in producing the output

b. The incremental change in total output that can be produced by the use of one more unit of the variable input in the production process

c. the percentage change in output resulting from a given percentage change in the amount

d. the amount of fixed cost involved

e. none of the above

Back 17

b. The incremental change in total output that can be produced by the use of one more unit of the variable input in the production process

Front 18

The following is a Cobb-Douglas production function: Q=1.75K0.5 x L0.5. What is correct here?

a. a one-percent change in L will cause Q to change by one percent

b. a one-percent change in K will cause Q to change by two percent

c. This production function displays increasing returns to scale

d. This production function displays constant returns to scale

e. This production function displays decreasing returns to scale

Back 18

d. This production function displays constant returns to scale

Front 19

Supposed you have a Cobb-Douglas function with a capital elasticity of output(a) of 0.28 and a labor elasticity of output (b) of 0.84. What statement is correct?

a. There are increasing returns to scale

b. If the amount of labor input (L) is increased by 1%, the output will increase by .84%

c. If the amount of capital input (K) is decrease by 1%, the output will decrease by .28%

d. The sum of the exponents in the Cobb-Douglas function is 1.112

e. all of the above

Back 19

e. all of the above

Front 20

The Cobb-Douglas production function is: Q= 1.4L0.6 x K0.5. What would be the percentage change in output if labor grows by 3% and capital is cut by 5%? HINT %changeQ=(El x %change L) + (Ek x %changeK)

a. +3%

b. +5%

c. -.7%

d. -2.5%

e. -5%

Back 20

c. -.7%

%changeQ=(.6)(3)+(.5)(5)

Front 21

IF the marginal product of labor is 100 and the price of labor is 10, while the marginal product of capital is 200 and the price of capital is $30, then what should the firm?

a. the firm should use relatively more capital

b. the firm should use relatively more labor

c. the firm should not make any changes-they are currently efficient

d. using the Equimarginal Criterion, we can't determine the firm's efficiency level

e. both c and d

Back 21

b. the firm should use relatively more labor

Front 22

The marginal rate of technical substitution may be defined as all of the following except:

a. the rate at which one input may be substituted for another input in the production process, while total output remains constant

b. equal to the negative slope of the isoquant at any point on the isoquant

c. the rate at which all combinations of inputs have equal total costs

d. equal to the ratio of the marginal products of X and Y

e. b and c

Back 22

c. the rate at which all combinations of inputs have equal total costs

Front 23

The law of diminishing marginal returns:

a. states that each and every increase in the amount of the variable factor employed in the production process will yield diminishing marginal returns

b. is a mathematical theorem that can be logically proved or disproved

c. is the rate at which one input may be substituted for another input in the production process

d. none of the above

Back 23

d. none of the above

Front 24

The combinations of inputs costing a constant C dollars is called:

a. an isocost line

b. an isoquant curve

c. the MRTS

d. an isorevenue line

e. none of the above

Back 24

a. an isocost line