Which of the following is true of the White test?
A. The White test is used to detect the presence of multicollinearity in a linear regression model.
B. The White test cannot detect forms of heteroskedasticity that invalidate the usual Ordinary Least Squares standard errors.
C. The White test can detect the presence of heteroskedasticty in a linear regression model even if the functional form is misspecified.
D. The White test assumes that the square of the error term in a regression model is uncorrelated with all the independent variables, their squares and cross products.
Answer: D
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If the demand curve facing a monopoly was 1 unit at $7, 2 units at $6, 3 units at $5, 4 units at $4, and 5 units at $3, at the point along the curve where 3 units are being sold, the elasticity of demand: a. is greater than one
b. is equal to one. c. is less than one. d. cannot be determined from the above information.
The price elasticity of demand is equal to
A) the value of the slope of the demand curve. B) the change in quantity demanded divided by the change in price. C) the percentage change in price divided by the percentage change in quantity demanded. D) the percentage change in quantity demanded divided by the percentage change in price.