BA notes(practice assignements mostly

numerical)

1. The price of an envelop was Rs. 3/ piece yesterday and Aditya bought 10
envelopes. Today, the price is Rs. 3.75/ piece and Aditya is willing to buy
only 8 envelopes. What is the elasticity of Aditya’s demand?

ans:
2. IITM-BA’s courses elasticity for number of student registrations is expected to
be constant at 0.9 for the next couple of years. Currently the course fee is
Rs.10,000 and 1500 students have registered. If the course fee is changes to
Rs. 8000, how many students will register?
ANS:
 Ans: 0

Therefore the value of Y*2 is 0

3.

what is the value of C & slope?

Ans:
4.

Ans: what is the value of P?

5.

Ans:
6. In order to calculate the VIF for the variable quantity, you implement a
linear regression with quantity as the dependent variable and other
variables as independent variables and obtain R-squared of 0.43. What is
the VIF for the variable quantity?
Ans:

7. In the multiple linear regression, you find that the direct effect of price on sales is
0.34, the direct effect of quantity on sales is 0.22 and the direct effect of rating score
on sales is 0.48. And, you also know that the effect of price on quantity is 0.22 and the
effect of price on rating score is 0.1. What is the total effect of price on sales?
 Ans:

8. In this multiple linear regression with 3 explanatory variables, you find that Rsquared
value is 0.74. The number of observations is 25. What is the value of adjusted R-
squared?
 Ans:

9. Suppose a factory manufactures products on two machines A and B.

Suppose 65% of total output comes from machine A, 30% of total output
comes from machine B and 5% of total output comes from machine C.
From the past data, it is known that 1% of products by machine A are
defectives, 2% of products by machine B are defectives and 0% of
products by machine C are defectives. What is the probability that the
product has come from machine B given that it is a defective?
Ans:
10.You are given the following results of a logistic regression model.

-If the threshold is set to 0.5, then how many True Positive values will the
model predict?
Ans:
To determine the number of True Positives (TP) with a threshold of 0.5, we
need to count the instances where both the actual value (Y_Actual) is 1
and the predicted probability (Y_Predicted_Prob) is greater than or equal
to 0.5.

-If the threshold is set to 0.5, then how many True Negative values will
the model predict?
Ans:
To determine the number of True Negatives (TN) with a threshold of 0.5,
we need to count the instances where both the actual value (Y_Actual) is
0 and the predicted probability (Y_Predicted_Prob) is less than 0.5.
11.Continuing with the 10th question:
-What is the accuracy of the model (round to two decimal places)?
ans:

its 19 not 20 so ans is 0.47

What is the precision of the model (round to two decimal places)?
Ans:
12.Continued for 10th one :
What is the recall of the model (round to two decimal places)?
ans:

13.
What is the total sample size for the above confusion matrix?
ans:

so ans is 8302
What is the accuracy of the model? (round to two decimal places)
Ans:
14.Continued for 13th one

How many False Positives is the model predicting?

Ans:
1432 (check in prev question)
How many False Negatives is the model predicting?
ans:
1324 (check in 2nd question of 13)
How many True Positives is the model predicting?
ans:
1234(check in 2nd question of 13)
How many True Negatives is the model predicting?
Ans:
4321(check in 2nd question of 13)
What is the precision for predicting 0’s? (round to two decimal places)
ans: Fp is 1423 here not 1324 so ans is 0.75

What is the recall for predicting 0’s? (round to two decimal places)
ans: Fn is 1324 here not 1423 so ans is 0.77
 15.Continued for 13th one:
What is the precision for predicting 1’s? (round to two decimal places)
ans:

What is the precision for predicting 1’s? (round to two decimal places)
ans:

so Recall=1234/1234+1324 , which is 0.48

Mock questions:

1.
What does region “A” represent?
ans: Latent demand- represented by an area where the demand curve lies above
the actual quantity supplied at a given price.
What does region “B” represent?
ans: Consumer Surplus-is the area between the demand curve and the price
level up to the quantity consumed.
Say the curve in the figure is modelled as a constant elasticity curve. If Q1 is
2400, Q3 is 1500, P1 is 100 and P3 is 200, then what is the elasticity of the
curve?
ans:
2.

The intercept from the regression output is given as 8125. This represents the
estimated demand when the price is zero. In many market analyses, this
intercept can be considered an indicator of potential market size under certain
conditions.
Therefore, based on the regression model provided, the total market size is
indeed 8125, as this is the value of demand when price is zero according to the
linear regression model.

What is the satiating price for the price-demand data based on the fitted model
(round your answer to one decimal place)?
Ans:

-194.267
is coefficient
What is the elasticity of demand, when the price is Rs. 22 (round to two
decimal places)?
ans:
 = 1.11
At the price of Rs. 22, based on the elasticity __
a. Demand is elastic
b. Demand is inelastic
c. Demand indicates luxury item
d. Demand indicates inferior item
ans:

ans is option a
As the price moves to the satiating price, then elasticity __? Mark]
a. Decreases
b. Increases
c. Remains same
d. Increases then decreases
e. Decreases then increases
Ans:

 What is the magnitude of correlation (along with direction) that exists between
the price and demand (round your answer to two decimal places)?
ans:

The fitted regression model

a. Is significant at a 95% confidence level
b. Is not significant at a 95% confidence level
c. Has an accuracy of ~70.84%
d. Has an accuracy of ~66.67%
Ans:

In Multiple Linear Regression, the “R” represents __ (choose all those that are
applicable)
a. Correlation between the dependent variable and all independent variables
b. Correlation between the actual and predicted values of the dependent variable
c. Correlation between the predicted value of the dependent variable and the
actual value of the independent variable
d. Correlation between the errors
e. Correlation between the actual and predicted value of any given independent
variable
f. Correlation between the actual value of the dependent variable and the
predicted value of the errors
g. None of the above
Ans:

3.You have estimated the demand to follow the following relationship: D(p)=100-
5*p. Now, you intend to maximize the revenue R(p)= D(p)*p. You find the first
derivative of R(p) with respect to p, equate it to 0 and find p^*. What is the value
of p^*?
Ans:

4.In a multiple linear regression with 4 explanatory variables, you find that R-
squared value is 0.74. The number of observations is 25. What is the value of
adjusted R-squared?
Ans:

which Is 0.68

5. You solve the primal of a linear program with maximization objective, three
decision variables and two constraints of the less than or equal to type. Non-
negativity restrictions apply on the decision variables. After solving the linear
program, you find that the first constraint is not binding (lhs < rhs) and the
second constraint is binding (lhs = rhs). Which of the following statements are
correct?
a) There are three decision variables in the dual
b) The dual variable corresponding to the second constraint is zero
c) There are two decision variables in the dual
d) The dual variable corresponding to the second constraint is non-zero
ans:

option c and d
6. You are conducting a multiple linear regression with sales as the dependent
variable. Price, quantity and rating score are the independent variables. In the
multiple linear regression, you find that the direct effect of price on sales is 0.3,
the direct effect of quantity on sales is 0.2 and the direct effect of rating score on
sales is 0.4. And, you also know that the effect of price on quantity is 0.2 and the
effect of price on rating score is 0.1. What is the total effect of price on sales?
ans: