# Quiz 4: Techniques for Understanding Consumer Demand and Behavior

Business

Q 1Q 1

Which of the following approaches to understanding and predicting consumer behavior depends primarily on the knowledge and experience of a firm's employees and its suppliers?
A) Direct consumer surveys.
B) Expert opinion.
C) Analysis of historical data.
D) Test marketing and price experiments

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Multiple Choice

B

Q 2Q 2

In which of the following situations would reliance on expert opinion as a basis for a managerial decision be most preferred?
A) When the product can be packaged with a variety of price and quality combinations.
B) When the business in question serves as a supplier of inputs to other businesses, especially in multi-product situations where other strategies may be prohibitively expensive.
C) When the level of economic activity can have a significant effect on the demand for the firm's output.
D) When the product being marketed is relatively new.

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Multiple Choice

B

Q 3Q 3

All of the following are limitations of direct consumer surveys except:
A) the possibility that consumers' responses may not reflect their actual behavior in the market place.
B) the possibility of response biases because survey respondents may not want to reveal their true preferences.
C) the likelihood that respondents will deliberately and systematically mislead interviewers.
D) the possibility that the type of questions asked may unintentionally bias the respondent's answers.

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Multiple Choice

C

Q 4Q 4

The approach to analyzing consumer behavior that asks consumers to rank and choose among different product attributes to reveal their relative valuation of different characteristics is called:
A) a direct consumer survey.
B) contingent valuation.
C) the hedonic estimation technique.
D) conjoint analysis.

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Multiple Choice

Q 5Q 5

Which of the following approaches to understanding and predicting consumer behavior does not actually solicit any information from potential customers?
A) Test marketing.
B) Conjoint analysis.
C) Analysis of historical data.
D) Expert opinion.

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Multiple Choice

Q 6Q 6

Which of the following approaches to understanding and predicting consumer behavior provides the most insight into how consumers can be expected to respond in an actual market setting?
A) Test marketing.
B) Conjoint analysis.
C) Analysis of historical data.
D) Expert opinion.

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Multiple Choice

Q 7Q 7

Which of the following statements is correct?
A) The use of Census data is especially useful and cost-effective in targeted marketing.
B) Census data are considered more reliable than data collected via direct consumer surveys because people are more likely to provide accurate responses to government census takers.
C) While the use of census data in targeting marketing can provide relatively accurate information, experience has shown that it has the disadvantage of increasing marketing costs by a substantial amount.
D) While census data are considerably less expensive than data obtained via direct consumer surveys, they are also considerably less reliable.

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Multiple Choice

Q 8Q 8

An approach to analyzing consumer behavior in which consumer reaction to different prices is analyzed in a laboratory situation or a test market is called:
A) price experiments.
B) non-price experiments.
C) focus groups.
D) none of the above.

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Multiple Choice

Q 9Q 9

Data collected on a sample of individuals with different characteristics at a specific point in time are called:
A) cross-section data.
B) time series data.
C) panel data.
D) none of the above.

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Multiple Choice

Q 10Q 10

Data collected on the same observation unit at a number of points in time are called:
A) cross-section data.
B) time series data.
C) panel data.
D) none of the above.

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Multiple Choice

Q 11Q 11

Cross-sectional data observed at several points in time is known as:
A) time series data.
B) panel data.
C) experimental data.
D) none of the above.

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Multiple Choice

Q 12Q 12

Regressional analysis that analyzes the relationship between one dependent variable and one independent variable is called:
A) simple regression analysis.
B) correlation analysis
C) multiple regression analysis.
D) cluster analysis.

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Multiple Choice

Q 13Q 13

Regression analysis that analyzes the relationship between one dependent variable and several independent variables is called:
A) simple regression analysis.
B) correlation analysis.
C) multiple regression analysis.
D) cluster analysis.

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Multiple Choice

Q 14Q 14

The least squares regression is based on:
A) maximizing the absolute sum of squares errors.
B) minimizing the absolute sum of squares errors.
C) maximizing the sum of squared errors.
D) minimizing the sum of squared errors.

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Multiple Choice

Q 15Q 15

You have the following demand equation for a pack of cigarettes: Q = 200 - 0.30P with the average quantity 3 packs and average price $3.00 per pack. What is the price elasticity?
A) 0.30
B) -0.30
C) 1.0
D) -1.0

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Multiple Choice

Q 16Q 16

A measure of how much the coefficient would vary in regressions based on different samples is called:
A) standard error of the estimated coefficient.
B) F-statistic.
C) partial F-statistic.
D) t-statistic.

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Multiple Choice

Q 17Q 17

The ratio of the regression coefficient to its standard error is called:
A) t-statistic.
B) F-statistic.
C) partial F-statistic.
D) coefficient of determination.

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Multiple Choice

Q 18Q 18

The test statistic used to test the hypothesis of whether a regression coefficient is significantly different from zero, holding all other independent variables constant, is called an):
A) F-test.
B) autocorrelation test.
C) multicollinearity test.
D) t-test.

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Multiple Choice

Q 19Q 19

The coefficient of determination is defined as the
A) ratio of the total sum of squared errors to the sum of squared errors.
B) ratio of the regression sum of squares to the sum of the squared errors.
C) ratio of the sum of squared errors to the total sum of squared errors.
D) none of the above.

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Multiple Choice

Q 20Q 20

The number of observations minus the number of estimated coefficients in a regression equation is called:
A) degrees of freedom.
B) variance.
C) standard error fo the regression.
D) none of the above.

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Multiple Choice

Q 21Q 21

The F-statistic is an alternative measure of goodness-of-fit of an estimated regression equation and defined as the
A) variation not explained by the regression equation relative to the variation explained.
B) variation explained by the regression equation to the variation not explained.
C) variation explained.
D) variation not explained.

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Multiple Choice

Q 22Q 22

The range of values in which we can be confident that the true regression coefficient lies within a given degree of probability is called a:
A) prediction interval.
B) confidence interval.
C) logistic regression.
D) none of the above.

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Multiple Choice

Q 23Q 23

The total sum of squares is 400 and the sum of squares errors is 100, what is the coefficient of determination?
A) 25
B) 0.75
C) 1.00
D) 0

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Multiple Choice

Q 24Q 24

An estimated regression coefficient is 10 with a standard error of 5. The null hypothesis is that the partial regression coefficient equals zero. What is the value of the t-statistic for testing the null hypothesis of the regression coefficient?
A) 1
B) 2
C) 0.5
D) 5

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Multiple Choice

Q 25Q 25

An estimated regression coefficient is 10 with a standard error of 5. The null hypothesis is that the partial regression coefficient equals one. What is the value of the t-statistic for testing the null hypothesis of the regression coefficient?
A) 1
B) 2
C) 1.8
D) 0.5

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Multiple Choice

Q 26Q 26

The coefficient of determination is .90, the number of observations is 30, and a multiple regression model using 2 independent variables is estimated. What is the value of the adjusted coefficient of determination?
A) )8926
B) )9000
C) )7500
D) )8000

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Multiple Choice

Q 27Q 27

The coefficient of determination will range between what values?
A) 0 and 1
B) -1 and +1
C) -3 and +3
D) none of the above

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Multiple Choice

Q 28Q 28

The estimated regression equation is Y = 10 + 2.5X, if X =0 than the predicted value of Y is equal to:
A) 12.5
B) 10
C) 2.5
D) 7.5

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Multiple Choice

Q 29Q 29

Given the demand function in log-linear form: Q = 120 - 1.5P + 12ADV where Q = quantity, P = price, and ADV = advertising expenditures, what is the price elasticity?
A) 1.5, inelastic
B) -1.5, elastic
C) 120, elastic
D) 12, elastic

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Multiple Choice

Q 30Q 30

Scenario 1: The demand model relating the quantity of good XYZ sold QXYZ) to the price of good PXYZ) is reported below:
QXYZ = 4.46 + .304 PXYZ
Coefficient Standard Error 4.46 3.04
.304 .3243
Analysis of Variance:
-Refer to Scenario 1. What is the t-statistic for the slope coefficient?
A) 3.04
B) 0.94
C) 0.30
D) 4.46

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Multiple Choice

Q 31Q 31

Scenario 1: The demand model relating the quantity of good XYZ sold QXYZ) to the price of good PXYZ) is reported below:
QXYZ = 4.46 + .304 PXYZ
Coefficient Standard Error 4.46 3.04
.304 .3243
Analysis of Variance:
-Refer to Scenario 1. What is the coefficient of determination?
A) 1.000
B) 0.000
C) 0.037
D) 0.324

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Multiple Choice

Q 32Q 32

Scenario 1: The demand model relating the quantity of good XYZ sold QXYZ) to the price of good PXYZ) is reported below:
QXYZ = 4.46 + .304 PXYZ
Coefficient Standard Error 4.46 3.04
.304 .3243
Analysis of Variance:
-Refer to Scenario 1. Is the slope coefficient statistically different from zero?
A) No.
B) Yes.
C) Inconclusive.
D) None of the above.

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Multiple Choice

Q 33Q 33

Scenario 1: The demand model relating the quantity of good XYZ sold QXYZ) to the price of good PXYZ) is reported below:
QXYZ = 4.46 + .304 PXYZ
Coefficient Standard Error 4.46 3.04
.304 .3243
Analysis of Variance:
-Refer to Scenario 1. What is the total sum of squares?
A) 3860.8
B) 3718.9
C) 141.9
D) none of the above.

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Multiple Choice

Q 34Q 34

In a multiple regression problem involving two independent variables, if b

_{1 }is computed to be +2.0, it means that: A) the relationship between X_{1 }and Y is significant. B) the estimated value of Y increases by an average of 2 units for each increase of 1 unit of X_{1}, holding X_{2}constant. C) the estimated value of Y increases by an average of 2 units for each increase of 1 unit of X_{1}, without regard to X_{2}. D) the estimated average value of Y is 2 when X_{1 }equals zero.Free

Multiple Choice

Q 35Q 35

A constant-elasticity demand function can be obtained by:
A) taking the logarithm of the dependent variable only.
B) taking the logarithm of the independent variables) only.
C) taking the logarithm of the dependent and independent variables).
D) taking the reciprocal of the dependent variables).

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Multiple Choice

Q 36Q 36

Reliance on expert opinion to predict consumer behavior has the advantage of being a relatively low cost approach to gathering information. In many situations, however, it is subject to several sources of bias that can undermine its reliability.

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True False

Q 37Q 37

Conjoint analysis employs an approach to consumer behavior that is similar to the economic indifference curve model.

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True False

Q 38Q 38

When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider whether the participating groups are representative of the larger population.

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True False

Q 39Q 39

When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider whether the answers given in these formats represent actual market behavior.

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True False

Q 40Q 40

When using expert opinion, consumer surveys, test marketing, and price experiments to analyze consumer behavior, managers must consider how to isolate the effect of different variables that influence demand.

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True False

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True False

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True False

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True False

Q 44Q 44

The total sum of squares equals the sum of squares of the variation explained by the regression and the sum of squares of the errors.

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True False

Q 45Q 45

The coefficient of determination is the proportion of the variation that is not explained by the regression model.

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True False

Q 46Q 46

The overall predictive power of the estimated regression equation is measured by the F-statistic.

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True False

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True False

Q 48Q 48

Adjusted R

^{2 }gives the actual percentage of the variation in the dependent variable explained by the regression model.Free

True False

Q 49Q 49

Adding an independent variable to a regression model will always reduce the coefficient of determination.

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True False

Q 50Q 50

The degrees of freedom in a regression equation is the number of observations minus the number of estimated coefficients.

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True False

Q 51Q 51

The coefficient of determination represents the ratio of the regression sum of squares to the total sum of squares.

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True False

Q 52Q 52

Regression analysis is used for prediction, while correlation analysis is used to measure the strength of the association between two variables.

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True False

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True False

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True False

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True False

Q 56Q 56

Briefly describe the three key points managers must consider when using expert opinion, consumer surveys, test marketing, and price experiments in analyzing consumer behavior.

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Essay

Q 57Q 57

What are the effects of two independent variables that are highly correlated? What can be done to remedy the problem?

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Essay

Q 58Q 58

Elaborate on the statement "Every multiple regression analysis is influenced by the sample of the data used".

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Essay

Q 59Q 59

Briefly explain why empirical consumer demand studies such as Patrick McCarthy's study of automobile demand are relevant to managers.

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Essay

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Essay