ECON 3370 Elasticity in economics

ECON 3370 HW 2 Answer each question as instructed and upload a copy to Blackboard! There are 8 questions. For questions 1-3 use the following matrix. Virgil’s Green Book is a reputable source for buyers to research local prices for new and used cars. Supposed Virgil surveyed over 1300 dealership CEOs and combined sales data from the sample with US census data describing the local economy near each car company. Free Response. Economists argue that the more dense a place is the local demand for goods and services will be higher. Use four sentences or less to discuss why population density is negatively correlated with car sales. IF we were to interpret the correlation between car sales and gas prices as an elasticity we might conclude that To understand the effect of X1 on Y the ceteris parabus assumption implies Requirements: 8question most of them multiple choice | .doc file From the statements below which claims can be reasonably supported by the table above? Choose all that may apply.Local income is positively correlated with car sales.If local incomes increase by 100% sales will increase by 55%.There is not a strong correlation between gas prices and car sales.The correlation between unemployment and sales might explain why sales plummet during a recession.None of the above Local income is positively correlated with car sales. If local incomes increase by 100% sales will increase by 55%. There is not a strong correlation between gas prices and car sales. The correlation between unemployment and sales might explain why sales plummet during a recession. None of the above Population density is defined as the number of people per square mile. Some notoriously dense cities in the US include NYC Boston San Francisco New Orleans Philadelphia and others. LA Atlanta and Houston are major cities that are not particularly dense overall. Recall that an elasticity in economics is defined as how fast quantity demanded changes when prices change. Let’s expand that to think about the elasticity of car sales with respect to gas prices under the assumption that permanent increases in gas prices will reduce the demand for cars.the demand for cars is highly elastic with respect to gas prices.the demand for cars is highly inelastic with respect to gas pricesthe demand for cars is unit elastic with respect to gas prices.the demand for cars is only somewhat elastic with respect to gas prices.None of the above. the demand for cars is highly elastic with respect to gas prices. the demand for cars is highly inelastic with respect to gas prices the demand for cars is unit elastic with respect to gas prices. the demand for cars is only somewhat elastic with respect to gas prices. None of the above. If the price of all houses in neighborhood were determined entirely by the square footage of the home a linear model that related house prices to square footage would be purelyrandomdeterministicvolumousrobuststochastic random deterministic volumous robust stochastic Measurement error can occur when variation in the data is generated by mistakes in data entry. Which of the following would you classify as measurement error if not addressed during data cleaning?The US Census Bureau enters “-9999” for household income when the census taker does not record the true value from a respondent.When submitting data for student heights the school nurse records anyone shorter than 50 inches tall as exactly 50 inches.Men aged 24-30 exaggerate personal income (ie report higher than they truly earn) on average while women of the same age do not.All of the aboveA & B only The US Census Bureau enters “-9999” for household income when the census taker does not record the true value from a respondent. When submitting data for student heights the school nurse records anyone shorter than 50 inches tall as exactly 50 inches. Men aged 24-30 exaggerate personal income (ie report higher than they truly earn) on average while women of the same age do not. All of the above A & B only For a six-sided die the expected value of a single dice roll is 3.5 although this number does not appear on any of the sides. Say you were to roll the dice 900 times calculate the mean then repeat this process 1000 times. If you plot the distribution of recorded means it would likely resemblea normal distribution centered around 4 a number that appears on the dicea normal distribution centered around 3 a number that appears on the dicea normal distribution centered around 3.5a uniform distribution reflecting the equal chance of attaining each sidenone of the above a normal distribution centered around 4 a number that appears on the dice a normal distribution centered around 3 a number that appears on the dice a normal distribution centered around 3.5 a uniform distribution reflecting the equal chance of attaining each side none of the above For a t-test to distinguish between two samples the respective distributions of the two samples must not overlap at any point.TrueFalse True False Consider the following regression X2 and X3 must not have any effect on Y X2 and X3 must be completely unrelated to X1 X2 and X3 must have a weaker effect on Y than X1 X1 is the constant term and has no assumptions for interpretation of the effect None of the above From the statements below which claims can be reasonably supported by the table above? Choose all that may apply.Local income is positively correlated with car sales.If local incomes increase by 100% sales will increase by 55%.There is not a strong correlation between gas prices and car sales.The correlation between unemployment and sales might explain why sales plummet during a recession.None of the abovePopulation density is defined as the number of people per square mile. Some notoriously dense cities in the US include NYC Boston San Francisco New Orleans Philadelphia and others. LA Atlanta and Houston are major cities that are not particularly dense overall.Recall that an elasticity in economics is defined as how fast quantity demanded changes when prices change. Let’s expand that to think about the elasticity of car sales with respect to gas prices under the assumption that permanent increases in gas prices will reduce the demand for cars.the demand for cars is highly elastic with respect to gas prices.the demand for cars is highly inelastic with respect to gas pricesthe demand for cars is unit elastic with respect to gas prices.the demand for cars is only somewhat elastic with respect to gas prices.None of the above.If the price of all houses in neighborhood were determined entirely by the square footage of the home a linear model that related house prices to square footage would be purelyrandomdeterministicvolumousrobuststochasticMeasurement error can occur when variation in the data is generated by mistakes in data entry. Which of the following would you classify as measurement error if not addressed during data cleaning?The US Census Bureau enters “-9999” for household income when the census taker does not record the true value from a respondent.When submitting data for student heights the school nurse records anyone shorter than 50 inches tall as exactly 50 inches.Men aged 24-30 exaggerate personal income (ie report higher than they truly earn) on average while women of the same age do not.All of the aboveA & B onlyFor a six-sided die the expected value of a single dice roll is 3.5 although this number does not appear on any of the sides. Say you were to roll the dice 900 times calculate the mean then repeat this process 1000 times. If you plot the distribution of recorded means it would likely resemblea normal distribution centered around 4 a number that appears on the dicea normal distribution centered around 3 a number that appears on the dicea normal distribution centered around 3.5a uniform distribution reflecting the equal chance of attaining each sidenone of the aboveFor a t-test to distinguish between two samples the respective distributions of the two samples must not overlap at any point.TrueFalseConsider the following regression Local income is positively correlated with car sales.If local incomes increase by 100% sales will increase by 55%.There is not a strong correlation between gas prices and car sales.The correlation between unemployment and sales might explain why sales plummet during a recession.None of the above the demand for cars is highly elastic with respect to gas prices.the demand for cars is highly inelastic with respect to gas pricesthe demand for cars is unit elastic with respect to gas prices.the demand for cars is only somewhat elastic with respect to gas prices.None of the above. randomdeterministicvolumousrobuststochastic The US Census Bureau enters “-9999” for household income when the census taker does not record the true value from a respondent.When submitting data for student heights the school nurse records anyone shorter than 50 inches tall as exactly 50 inches.Men aged 24-30 exaggerate personal income (ie report higher than they truly earn) on average while women of the same age do not.All of the aboveA & B only a normal distribution centered around 4 a number that appears on the dicea normal distribution centered around 3 a number that appears on the dicea normal distribution centered around 3.5a uniform distribution reflecting the equal chance of attaining each sidenone of the above TrueFalse X2 and X3 must not have any effect on YX2 and X3 must be completely unrelated to X1X2 and X3 must have a weaker effect on Y than X1X1 is the constant term and has no assumptions for interpretation of the effectNone of the above