A problem with using the price of a product similar to the intermediate good sold on the market is
a. the market price includes a margin above marginal cost
b. the product on the market may include costly features your downstream division does not use
c. the product on the market may be cheap because it is not as high of quality as your downstream division uses
d. all of the above
QUESTION 2If the government imposes a price floor at 10 (i.e. the price must be 10 or higher) in the above market, how many goods will be traded?
a. Four
b. Five
c. Six
d. Seven
QUESTION 3The use of quarterly data to develop the forecasting model Yt = a +bYt1 is an example of which forecasting technique?
a. Barometric forecasting
b. Time-series forecasting
c. Survey and opinion
d. Econometric methods based on an understanding of the underlying economic variables involved
e. Input-output analysis
QUESTION 4If products similar to the intermediate good can be bought externally, an approximation of the correct transfer price is
a. average costs
b. average fixed costs
c. average variable costs
d. the market price
QUESTION 5Suppose there are 11 buyers and 11 sellers, each willing to buy or sell one unit of a good, with values 14, 13, 12, 11, 10, 9, 8, 7, 6, 5, 4,. Assume no transaction costs and a competitive market, what is the equilibrium price in this market?
a. 7
b. 8
c. 9
d. 10
QUESTION 6The 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
QUESTION 7If the fixed costs are relatively large, a relatively good approximation of the correct transfer price is
a. average costs
b. average fixed costs
c. average variable costs
d. the market price
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