AGBM 106 Exam 1 questions and
answers graded A+ already passed
Change in price - correct answer ✔✔Movement along demand curve
Demand curve SHIFTERS - correct answer ✔✔Income level
Tastes & Preferences
Price of substitute/complement goods
Income is usually a ______ shift - correct answer ✔✔Positive- shits to the right
Inferior goods - correct answer ✔✔When income goes up, we get a negative shift- people buy
less of the good
ex. bologna, canned tuna, burger king
Substitutes - correct answer ✔✔When the price of a substitute good increases, the demand for
that good makes a POSITIVE shift
ex. If the price of turkey goes up, less people will buy turkey so they'll buy more chicken,
therefor demand for chicken shifts to the right
Substitute demand curve - correct answer ✔✔Qd= B0-B1*Pchicken+B2*Pturkey+B3*Income
Chicken and turkey have OPPOSITE relationships
Complements - correct answer ✔✔If the price of a complement good increases, the demand for
the good shifts to the left (neg. shift)
, - if $ PB goes up, demand for jelly makes a neg. shift
-less people will buy jelly because price of its complement is too expensive
Complement demand curve - correct answer ✔✔Qd=B0-B1*Pjelly-B2*Ppb+B3*Income
Same relationship
Conditional Average - correct answer ✔✔Use info about one variable to make more accurate
predictions about a different variable
ex.) use gender to predict height
Use price to predict quantity demanded
How to determine B0 and B1 in a demand equation - correct answer ✔✔Solver in excel
Predicted, error, error^2, SSE
Set objective SSE, by changing B0, B1
A manager of a firm needs to determine- - correct answer ✔✔the optimal production plan
Profit - correct answer ✔✔Total Revenue-Total Cost
Total revenue - correct answer ✔✔TR=P*Q
= price of output* Quantity of output
Marginal revenue - correct answer ✔✔TR2-TR1/ Q2-Q1
how much revenues will change on a per unit basis
Total Cost - correct answer ✔✔= Total fixed cost + Total Variable cost
answers graded A+ already passed
Change in price - correct answer ✔✔Movement along demand curve
Demand curve SHIFTERS - correct answer ✔✔Income level
Tastes & Preferences
Price of substitute/complement goods
Income is usually a ______ shift - correct answer ✔✔Positive- shits to the right
Inferior goods - correct answer ✔✔When income goes up, we get a negative shift- people buy
less of the good
ex. bologna, canned tuna, burger king
Substitutes - correct answer ✔✔When the price of a substitute good increases, the demand for
that good makes a POSITIVE shift
ex. If the price of turkey goes up, less people will buy turkey so they'll buy more chicken,
therefor demand for chicken shifts to the right
Substitute demand curve - correct answer ✔✔Qd= B0-B1*Pchicken+B2*Pturkey+B3*Income
Chicken and turkey have OPPOSITE relationships
Complements - correct answer ✔✔If the price of a complement good increases, the demand for
the good shifts to the left (neg. shift)
, - if $ PB goes up, demand for jelly makes a neg. shift
-less people will buy jelly because price of its complement is too expensive
Complement demand curve - correct answer ✔✔Qd=B0-B1*Pjelly-B2*Ppb+B3*Income
Same relationship
Conditional Average - correct answer ✔✔Use info about one variable to make more accurate
predictions about a different variable
ex.) use gender to predict height
Use price to predict quantity demanded
How to determine B0 and B1 in a demand equation - correct answer ✔✔Solver in excel
Predicted, error, error^2, SSE
Set objective SSE, by changing B0, B1
A manager of a firm needs to determine- - correct answer ✔✔the optimal production plan
Profit - correct answer ✔✔Total Revenue-Total Cost
Total revenue - correct answer ✔✔TR=P*Q
= price of output* Quantity of output
Marginal revenue - correct answer ✔✔TR2-TR1/ Q2-Q1
how much revenues will change on a per unit basis
Total Cost - correct answer ✔✔= Total fixed cost + Total Variable cost
