Dummy or Indicator Variables Typically Are Values of Zero or One

question 33

Multiple Choice

Dummy or indicator variables typically are values of zero or one and are used to model the effects of different levels of ________ variables.

• A) qualitative
• B) quantitative
• C) ratio
• D) measured

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Definitions:

Cournot Equilibrium

A situation in an oligopoly market where each firm chooses its optimal output, assuming the outputs of its competitors are fixed.

Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, or property taxes.

Downward-Sloping

Characteristic of a curve on a graph indicating a decrease in one variable as another variable increases, often seen in demand curves.

Cournot Duopolists

Firms in a duopoly market structure who decide on their output level assuming the output of the competitor is fixed, leading to a strategic interdependence.