Deck 7: Demand Estimation and Forecasting

Question 1

Demand equations derived from actual market data are

A)empirical demand functions.
B)never estimated using consumer interviews.
C)generally estimated using regression analysis.
D)both a and c
E)all of the above

Answer 1

D

Question 2

estimated demand for a good is $\hat { Q } = 25 - 5 P + 0.32 M + 12 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.This good and the related good R are

A)complements since the coefficient on M is positive.
B)substitutes since the coefficient on M is positive.
C)complements since the coefficient on $P _ { R }$ is positive.
D)substitutes since the coefficient on $P _ { R }$ is positive.

Answer 2

substitutes since the coefficient on $P _ { R }$ is positive.

Question 3

representative sample

A)eliminates the problem of response bias.
B)reflects the characteristics of the population.
C)is frequently a random sample.
D)both b and c
E)all of the above

Answer 3

D

Question 4

Build-Right Concrete Products produces specialty cement used in construction of highways.Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: $Q = a P ^ { b } M ^ { c } P _ { R } ^ { d }$ where Q = yards of cement demanded monthly,P = the price of Build-Right's cement per yard,M = state tax revenues per capita,and $P _ { R }$ = the price of asphalt per yard.The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation.The estimation results are presented below: Given the above,at the 1 percent level of significance,the number of degrees of freedom for a t-test is _____,and the critical value of the t-statistic is ________.Only parameter estimate(s)________ is (are)NOT statistically significant at the 1 percent level of significance.

A)30; 2.457; $\hat { a }$
B)30; 2.750; $\hat { a }$
C)34; 2.042; $\hat {C}$
D)34; 2.042, $\hat { a }$ and $\hat {C}$

Question 5

Possible problems with consumer interviews include:

A)a non-random sample
B)the identification problem
C)response bias
D)both a and b
E)both a and c

Question 6

estimated demand for a good is $\hat { Q } = 25 - 5 P + 0.32 M + 12 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.The good is

A)an inferior good since the coefficient on $P _ { R }$ is positive.
B)a normal good since the coefficient on $P _ { R }$ is positive.
C)an inferior good since the coefficient on M is greater than one.
D)a normal good since the coefficient on M is positive.
E)none of the above

Question 7

The estimated demand for a good is $\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.If income decreases by $2,000,all else constant,quantity demanded will ________ by _________ units.

A)increase; 1.30 units
B)decrease; 6.5 units
C)increase; 1,300 units
D)decrease; 65 units

Question 8

Build-Right Concrete Products produces specialty cement used in construction of highways.Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: $Q = a P ^ { b } M ^ { c } P _ { R } ^ { d }$ where Q = yards of cement demanded monthly,P = the price of Build-Right's cement per yard,M = state tax revenues per capita,and $P _ { R }$ = the price of asphalt per yard.The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation.The estimation results are presented below: Given the above,the estimated cross-price elasticity of demand for cement relative to the price of asphalt is

A)0.3
B)0.6
C)1.2
D)3.0
E)none of the above

Question 9

If demand is estimated using the empirical specification $\ln Q = \ln a + b \ln P + c \ln M + d \ln P _ { R }$ ,then an equivalent expression for demand is

A) $\ln Q = a + b P + c M + d P _ { R }$ .
B) $Q = a + b P + c M + d P _ { R }$ .
C) $Q = e ^ { a } + b P + c M + d P _ { R }$ .
D) $Q = a b P c M d P _ { R }$ .
E)none of the above

Question 10

estimated demand for a good is $\hat { Q } = 25 - 5 P + 0.32 M + 12 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.If the price of the good falls by $4,the quantity demanded will ________ by ________ units.

A)increase; 5 units
B)increase; 20 units
C)increase; 50 units
D)increase; 48 units
E)decrease; 12 units

Question 11

The estimated demand for a good is $\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.The good is

A)an inferior good since the coefficient on $P _ { R }$ is negative.
B)a normal good since the coefficient on $P _ { R }$ is negative.
C)a normal good since the coefficient on M is greater than one (in absolute value).
D)an inferior good since the coefficient on M is negative.
E)none of the above

Question 12

The estimated demand for a good is $\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.This good and good R are

A)complements since the coefficient on M is negative.
B)substitutes since the coefficient on M is negative.
C)complements since the coefficient on $P _ { R }$ is negative.
D)substitutes since the coefficient on $P _ { R }$ is negative.
E)none of the above

Question 13

Build-Right Concrete Products produces specialty cement used in construction of highways.Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: $Q = a P ^ { b } M ^ { c } P _ { R } ^ { d }$ where Q = yards of cement demanded monthly,P = the price of Build-Right's cement per yard,M = state tax revenues per capita,and $P _ { R }$ = the price of asphalt per yard.The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation.The estimation results are presented below: Given the above,if the price of asphalt ( $P _ { R }$ )decreases 20%,the estimated quantity of cement demanded will:

A)increase 12%
B)increase 6%
C)increase 1.2%
D)decrease 12%.
E)decrease 1.2%.

Question 14

The estimated demand for a good is $\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.If the price of the good rises by $10,all else constant,the quantity demanded will ________ by ________ units.

A)increase; 16 units
B)decrease; 160 units
C)decrease; 1.5 units
D)increase; 150 units

Question 15

Build-Right Concrete Products produces specialty cement used in construction of highways.Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: $Q = a P ^ { b } M ^ { c } P _ { R } ^ { d }$ where Q = yards of cement demanded monthly,P = the price of Build-Right's cement per yard,M = state tax revenues per capita,and $P _ { R }$ = the price of asphalt per yard.The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation.The estimation results are presented below: Given the above,if tax revenue per capita (M)increases 5%,the estimated quantity of cement demanded will

A)increase by less than 1%.
B)increase more than 1% but less than 5%.
C)increase more than 5% but less than 10%.
D)increase more than 10%.

Question 16

estimated demand for a good is $\hat { Q } = 25 - 5 P + 0.32 M + 12 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.The coefficient on P

A)does not have the expected sign.
B)is negative as expected.
C)should have the same sign as the coefficient on $P _ { R }$ .
D)should not be greater than one (in absolute value).
E)both b and d

Question 17

estimated demand for a good is $\hat { Q } = 25 - 5 P + 0.32 M + 12 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.If income decreases by $1,000,all else constant,quantity demanded will ________ by _________ units.

A)decrease; 320 units
B)increase; 3.2 units
C)decrease; 1200 units
D)increase; 500 units
E)decrease; 500 units

Question 18

estimated demand for a good is $\hat { Q } = 4,800 - 16 P - 0.65 M - 1.5 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.The coefficient on P

A)violates the law of demand.
B)is negative as dictated by the law of demand.
C)should not be greater than one (in absolute value).
D)should have the same sign as the coefficient on $P _ { R }$ .
E)both c and d

Question 19

Build-Right Concrete Products produces specialty cement used in construction of highways.Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: $Q = a P ^ { b } M ^ { c } P _ { R } ^ { d }$ where Q = yards of cement demanded monthly,P = the price of Build-Right's cement per yard,M = state tax revenues per capita,and $P _ { R }$ = the price of asphalt per yard.The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation.The estimation results are presented below: Given the above,the estimated demand for cement is

A)elastic because $\hat { E }$ = -4.0.
B)elastic because $\hat { E }$
= -2.0.
C)elastic because $\hat { E }$
= -1.5.
D)inelastic because $\hat { E }$
= -0.32.
E)inelastic because $\hat { E }$
= -0.8.

Question 20

problem with consumer interviews is that

A)the sample may not be a representative sample.
B)response bias.
C)interviews allow for rapid turnaround.
D)both a and b
E)all of the above

Question 21

Time-series data

A)show the behavior of a particular variable over time.
B)may exhibit trend or cyclical variation,but not both at the same time.
C)may exhibit trend and cyclical variation at the same time.
D)both a and b
E)both a and c

Question 22

Seasonal or cyclical variation in a time series model

A)is regular in nature and can be accounted for by dummy variables.
B)can decrease the accuracy of a forecast if not accounted for by dummy variables.
C)exhibits irregular variation that can be accounted for by dummy variables.
D)both a and b
E)both b and c

Question 23

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below: Assume that the income is $10,000,the price of the related good is $40,and Conlan chooses to set the price of this product at $30.At the prices and income given above,Conlan can expect to sell _________units.

A)342
B)600
C)724
D)864
E)872

Question 24

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below: For the next 2 questions suppose income remains at $10,000 but the price of the related good increases to $60 and Conlan decides to raise the price of its product to $50.At the prices and income given above,Conlan can expect to sell _________units.

A)342
B)600
C)724
D)864
E)872

Question 25

Dummy variables are used in time-series forecasting models

A)to change the intercept of a regression in selected periods.
B)to account for random variation in the data.
C)to account for seasonal variation in the data.
D)both a and b
E)both a and c

Question 26

A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are: Given the above,these estimates indicate that the second quarter change in sales is

A)22.5 units higher in the second quarter than in the other three quarters.
B)1.86 units higher in the second quarter than in the other three quarters.
C)2.00 units higher in the second quarter than in the other three quarters.
D)24.5 units higher in the second quarter than in the other three quarters.

Question 27

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below: Assume that the income is $10,000,the price of the related good is $40,and Conlan chooses to set the price of this product at $30.At the prices and income given above,what is the income elasticity?

A)-1.62
B)-0.87
C)0.21
D)0.31
E)1.50

Question 28

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below: Given the above,based upon the parameter estimates in the above table

A)this good is a normal good.
B)the related good is a substitute.
C)the related good is a complement.
D)a and b
E)a and c

Question 29

Build-Right Concrete Products produces specialty cement used in construction of highways.Build-Right is a price-setting firm and estimates the demand for its cement by the State Highway Department using a demand function in the nonlinear form: $Q = a P ^ { b } M ^ { c } P _ { R } ^ { d }$ where Q = yards of cement demanded monthly,P = the price of Build-Right's cement per yard,M = state tax revenues per capita,and $P _ { R }$ = the price of asphalt per yard.The manager at Build-Right transforms the nonlinear relation into a linear relation for estimation.The estimation results are presented below: Given the above,if Build-Right decides to charge the State Highway Department $55 per yard for its cement when tax revenues per capita are $3,200 and the price of asphalt is $35 per yard,the expected quantity demanded is

A)1,000 yards of cement.
B)2,000 yards of cement.
C)4,000 yards of cement.
D)6,000 yards of cement.
E)8,000 yards of cement.

Question 30

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below: Given the above,at the 1% level of significance,which estimates are statistically significant?

A)All are statistically significant
B)All but $\hat { a }$ are statistically significant
C)Only $\hat { a } , \hat { b } \text {, and } \hat { c }$ are statistically significant
D)Only $\hat { a }$ is statistically significant
E)All but $\hat { b } \text { and } \hat { d }$ are statistically significant

Question 31

The estimated demand for a good X is $\hat { Q } = 70 - 3.5 P - 0.6 M + 4 P _ { Z }$ ,where $\hat { Q }$ = units of the good,P = price of the good,M = income,and $P _ { z }$ = price of related good Z.All parameter estimates are statistically significant.Which of the following statements is correct?

A)X is a normal good.
B)X is an inferior good.
C)X and Z are substitutes.
D)X and Z are complements.
E)both b and c

Question 32

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below: Assume that the income is $10,000,the price of the related good is $40,and Conlan chooses to set the price of this product at $30.At the prices and income given above,what is the price elasticity of demand?

A)-0.43
B)-0.86
C)-1.00
D)-1.43
E)-2.40

Question 33

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below: Given the above,at the 1% level of significance,the critical value of the t-statistic used by Conlan to test for statistical significance has _____ degrees of freedom and is equal to ________.

A)32; 0.7984
B)32; 36.14
C)32; 4.57
D)30; 2.750
E)28; 2.763

Question 34

Manager-determined prices are

A)not determined by the forces of demand and supply.
B)exogenous variables in a demand equation.
C)associated with price-taking firms.
D)both a and b
E)both b and c

Question 35

Qualitative forecasting methods

A)use higher quality data than statistical methods.
B)are often the result of expert opinion.
C)cannot be replicated by another researcher.
D)both b and c
E)all of the above

Question 36

A market-determined price

A)is determined by the manager of a firm.
B)is determined by the intersection of demand and supply curves.
C)is an endogenous variable
D)both a and b
E)both b and c

Question 37

A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are: Give the above,at the 1 percent level of significance,is there a statistically significant trend in sales?

A)No,since 1.86 < 2.704
B)No,since 0.55 < 1.86
C)No,since 1.02 < 2.704
D)Yes,since 1.86 > 0.55
E)Yes,since 3.38 > 2.704

Question 38

The following linear demand specification is estimated for Conlan Enterprises,a price-setting firm: $Q = a + b P + c M + d P _ { R }$ where Q is the quantity demanded of the product Conlan Enterprises sells,P is the price of that product,M is income,and $P _ { R }$ is the price of a related product.The results of the estimation are presented below: For the next 2 questions suppose income remains at $10,000 but the price of the related good increases to $60 and Conlan decides to raise the price of its product to $50.What is the new own price elasticity of demand?

A)-0.24
B)-0.43
C)-0.87
D)-1.00
E)-1.26

Question 39

A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are: Given the above,at the 1 percent level of significance,is there a statistically significant trend in sales?

A)Yes,because 0.0016 < 0.01.
B)No,because 0.0016 < 0.01.
C)Yes,because 0.55 > 0.01.
D)Yes,because 1.86 > 0.01.
E)both c and d

Question 40

Time-series models

A)cannot be replicated by another researcher.
B)use dummy variables to control for cyclical variation.
C)use dummy variables to control for time trend.
D)both a and b
E)both b and c

Question 41

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. The estimated QUARTERLY increase in sales is ______ units,and the estimated ANNUAL increase in sales is ______ units.

A)1.5; 6
B)1.4; 4
C)30; 4
D)1.5; 40
E)none of the above

Question 42

A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are: Using the estimated trend line above,what is the predicted level of sales in 2020IV ?

A)110.06
B)106.20
C)104.34
D)102.2
E)none of the above

Question 43

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. In any given year,quarterly sales tend to vary as follows:

A)Q_I > Q_II > Q_III > Q_IV
B)Q_I > Q_II > Q_IV > Q_III
C)Q_II > Q_III > Q_IV > Q_I
D)Q_III > Q_II > Q_I > Q_IV
E)Q_III > Q_IV > Q_II > Q_I

Question 44

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36)and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ { t }$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. What is the estimated intercept of the trend line in the 1st quarter?

A)24
B)-8
C)32
D)16
E)none of the above

Question 45

Problems in forecasting include:

A)estimates becoming more reliable the further you forecast into the future
B)specification error
C)cyclical variation
D)both b and c
E)all of the above

Question 46

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36)and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ { t }$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. At the 2 percent level of statistical significance,is there a statistically significant trend in the price of dolls?

A)Yes,because 0.0022 < 0.02.
B)No,because 0.0022 > 0.02.
C)Yes,because 0.800 > 0.02.
D)Yes,because 0.240 > 0.02.
E)Yes,because 3.33 > 0.02.

Question 47

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. Using the estimation results given above,the predicted level of sales in 2022I is _______ units.

A)137.5
B)139
C)133.5
D)132
E)none of the above

Question 48

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. Using a 5 percent significance level,these estimation results indicate that sales in

A)the first quarter are greater than sales in any other quarter.
B)the second quarter are greater than sales in any other quarter.
C)the third quarter are greater than sales in any other quarter.
D)the fourth quarter are greater than sales in any other quarter.

Question 49

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36)and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ { t }$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. The estimated QUARTERLY increase in price is ______,and the estimated ANNUAL increase in price is ______ .

A)$1.50; $6.00
B)$1.40; $4.00
C)$0.60; $2.40
D)$0.80; $3.20
E)none of the above

Question 50

A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are: Using the estimated trend line above,what is the predicted level of sales in 2021I ?

A)110.06
B)106.20
C)104.34
D)102.2
E)none of the above

Question 51

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. Using the estimation results given above,the predicted level of sales in 2022III is _______ units.

A)141.5
B)156
C)172
D)173.5
E)none of the above

Question 52

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36)and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ { t }$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. What is the estimated intercept of the trend line in the 4th quarter?

A)22.8
B)16
C)18
D)20
E)none of the above

Question 53

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. At the 5 percent level of significance,is there a statistically significant trend in sales?

A)No,because 1.5 < 2.66.
B)No,because 1.5 < 2.00.
C)No,because 2.14 < 2.66.
D)Yes,because 2.14 > 2.00.
E)none of the above

Question 54

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. What is the estimated intercept of the trend line in the fourth quarter?

A)0
B)40
C)55
D)70
E)none of the above

Question 55

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. What is the estimated intercept of the trend line in the second quarter?

A)25
B)26.6
C)55
D)65
E)none of the above

Question 56

A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are: Given the above,what is the estimated intercept of the trend line in the third quarter?

A)22.50
B)24.50
C)24.36
D)2.00
E)none of the above

Question 57

A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are: Given the above,what is the estimated intercept of the trend line in the second quarter?

A)22.50
B)24.50
C)24.36
D)2.00
E)none of the above

Question 58

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. Using the estimation results given above,the predicted level of sales in 2022IV is _______ units.

A)125
B)127.50
C)132
D)133.5
E)none of the above

Question 59

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. Using the estimation results given above,the predicted level of sales in 2022II is _______ units.

A)127.5
B)137.5
C)154
D)155.5
E)none of the above

Question 60

A forecaster used the regression equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$ and quarterly sales data for 2004I-2021IV (t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and $D _ { 1 } , D _ { 2 }$ and $D _ { 3 }$ are dummy variables for quarters I,II,and III. At the 5 percent level of significance,is there a statistically significant trend in sales?

A)Yes,because 0.0362 < 0.05.
B)No,because 0.0362 > 0.01.
C)Yes,because 0.700 > 0.05.
D)Yes,because 2.14 >0.05.
E)both c and d

Question 61

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36)and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ { t }$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. At the 2 percent level of statistical significance,the estimation results indicate that price in the ________ quarter is significantly higher than in any other quarter.

A)1st
B)2nd
C)3rd
D)4th

Question 62

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36)and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ { t }$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. Using the estimated time-series regression,predicted price in the 2nd quarter of 2021 is

A)$48.40
B)$54.40
C)$40.40
D)$51.40
E)none of the above

Question 63

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36)and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ {t }$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. Using the estimated time-series regression,predicted price in the 1st quarter of 2014 is

A)$53.60.
B)$45.60.
C)$56.00.
D)$37.60.
E)none of the above

Question 64

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36)and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ { t}$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. In any given year price tends to vary from quarter to quarter as follows:

A)P_I > P_II > P_III > P_IV
B)P_I > P_IV > P_III > P_II
C)P_II > P_III > P_IV > P_I
D)P_III > P_I > P_II > P_IV
E)P_IV > P_III > P_II > P_I

Question 65

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36)and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ { t }$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. At the 2 percent level of statistical significance,the results indicate that price in the ________ quarter is significantly lower than in any other quarter.

A)1st
B)2nd
C)3rd
D)4th