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Problem regarding the demand function for good

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Reference no: EM13839476

The demand function for good X is QXd = a + bPX + cM + e, where Px is the price of good X and M is income. Least squares regression reveals that:The R-squared is 0.35.

52_Demand function for good.jpg

a. Compute the t-statistic for each of the estimated coefficients.

Instruction: Round your answers to the nearest 2 decimal places.

624_estimated coefficients.jpg

b. Determine which (if any) of the estimated coefficients are statistically different from zero. Select one:

  • The coefficient estimate for c is statistically different from zero.
  • The coefficient estimate for b is statistically different from zero.
  • The coefficient estimates for b and c are statistically different from zero.
  • The coefficient estimates for a and c are statistically different from zero.

c. What does the R-square in this regression indicate? Select one:

  • 35 percent of the variability in income is explained by price.
  • 35 percent of the variability in the dependent variable is explained by price and income.
  • 65 percent of the variability in the dependent variable is explained by price and income.
  • 35 percent of the variability in price is explained by income.

Reference no: EM13839476

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