The Table Above Shows a Sample of Actual Data Used

question 81

Multiple Choice

The table above shows a sample of actual data used to estimate the demand function for Happy Clams seafood dinners.
-Refer to the table above. Excel estimates the demand function for Happy Clams seafood dinners to be: Q^d = 1,200 - (20.50 × P) . Which of the following statements is true?

• A)When the price is equal to $22, the actual quantity sold exceeds the predicted quantity sold.
• B)When the price is equal to $22, the actual quantity sold equals the predicted quantity sold.
• C)When the price is equal to $22, the estimated residual is zero.
• D)When the price is equal to $22, the predicted quantity sold exceeds the actual quantity sold.

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Definitions:

Consumption Function

The relationship in the economy between consumption and income, other things constant.

Saving Function

The relationship between the level of saving and the level of income, typically showing that saving increases as income increases.

Consumption Function

An economic formula that expresses the relationship between total consumption and gross national income, indicating how much households are likely to spend.

Disposable Income

Disposable income refers to the amount of money individuals or households have available to spend or save after income taxes are deducted.