# IEcoS (Economic Services) Economics Paper-1: Questions 74 - 77 of 85

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## Question number: 74

» Quantitative Methods in Economics » Statistical and Econometric Methods » Sampling and Survey Methods

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Appeared in Year: 2016

Essay Question▾

### Describe in Detail

Distinguish between point estimation and interval estimation of a population parameter. State the small sample properties of a good estimator.

### Explanation

• If we find a single value with the help of sample observations which is taken as the estimated value of unknown parameter then this value is known as point estimate and the technique of estimating the unknown parameter with a single value is known as “point estimation”.

• If we find two values between which the parameter may be considered to

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## Question number: 75

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Appeared in Year: 2014

Essay Question▾

### Describe in Detail

The demand for good X is estimated to be Q =, where M is the (average) consumer income and is the price of a related good Y. The values of P, M and expected to Rs. 200, Rs. 60,000 and Rs. 100 respectively.

(a) Calculate the price elasticity of demand, income elasticity of demand and cross price elasticity.

(b) Is the demand for X elastic, inelastic, or unit-elastic? How would a small increase in affect total revenue?

(c) Is the good X normal or inferior? Are the goods X and Y substitutes or complements?

### Explanation

Q

a)

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## Question number: 76

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Appeared in Year: 2014

Essay Question▾

### Describe in Detail

Assume that a monopolist sells a product with the cost function, where C is total cost, F is a fixed cost, and Q is the level of output. The inverse demand function is, where P is the price in the market.

(i) How much profit does the firm earn when it charges the price that Maximizes profit?

(ii) At what price will the firm earn zero economic profits?

### Explanation

(F = fixed cost)

(i)

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## Question number: 77

» Quantitative Methods in Economics » Statistical and Econometric Methods » Testing of Hypothesis, Simple Non-Parametric Tests

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Appeared in Year: 2016

Essay Question▾

### Describe in Detail

Define level of significance. How is this level decided for a given problem? Can we take it as or? Explain.

### Explanation

Level of significance is defined as the maximum size of type I error, which we are prepared to risk.

• It is denoted by α and is the probability of rejecting the null hypothesis.

• The level of significance should be decided with careful consideration of the key factors such as the sample size, power of the test, and expected losses from Type

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