Reference no: EM13214905
An MBA student has proposed the following demand equation for good Y.
QdY = a + b PY + c M
where: QdY = quantity demanded of good Y in millions of tons per year
PY = Price of good Y in dollars per ton
M = Average consumer income in thousands of dollars
What sign should this student expect a, b, and c to have? Explain.
The regression output from the computer is as follows:
Dependent Variable: QdY R-Square F-ratio p-value on F
Observations: 90 .6 12.84 0.015
Variable Parameter Estimate Standard Error T-ratio P-Value
Intercept 60.00 5468.32 3.12 0.0082
PY -2.00 0.65 -2.86 0.0145
M 0.01 3.29 4.12 0.0831
This economist is comfortable using parameter estimates that are statistically significant at the 10 percent level or better.
Does PY have a statistically significant effect on the quantity demanded of good Y? Explain, using the appropriate p-value.
Does M have a statistically significant effect on the quantity demanded of good Y? Explain, using the appropriate p-value.
What fraction of the total variation in the quantity demanded of good Y remains unexplained? What can the student do to increase the explanatory power of his demand equation? What other variables might he add to his demand equation?
What is the expected quantity demanded of good y when PY = 50 and M = 20,000?
|
How a time driven abc cost system can be implemented
: Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
|
|
Describe the effect of each of the following events
: Describe the effect of each of the following events on the demand or supply of gasoline in the USA. Further indicate the likely direction in the amount of gasoline exchanged AND the expected market price.
|
|
Identify the resulting consumer and producer surplus using
: Identify the resulting consumer and producer surplus using the "Final" (surplus) shader tool.
|
|
Find who is the majority owner of a corporation
: the personal holding company (PHC) tax penalizes taxpayers that enter into tax-motivated transactions designed to shelter passive income of closely held corporations from higher individual tax rates. Suppose you represent a professional athlete.
|
|
What fraction of the total variation in the quantity
: What fraction of the total variation in the quantity demanded of good Y remains unexplained? What can the student do to increase the explanatory power of his demand equation? What other variables might he add to his demand equation?
|
|
Solve for the equilibrium price and quantity
: Solve for the equilibrium price and quantity. Assume the price is expressed in dollars and the quantity is defined in 1,000's of units.
|
|
What was the effect on the worldwide market
: What was the effect on the worldwide market for alcoholic beverages of the Eighteenth Amendment to the U.S. Constitution, which banned the sale or production of alcohol in the United States? (what happened to the supply curves, demand curves, and ..
|
|
What is the market equilibrium price and quantity
: Demand in a perfectly competitive market is Q = 100 - P . Supply in that market is Q = P - 10.
|
|
What total amount will be paid to the preferred shareholders
: Legacy issues $700,000 of 7.5%, four-year bonds dated January 1, 2013, that pay interest semiannually on June 30 and December 31. They are issued at $643,419 and their market rate is 10% at the issue date. 1.Prepare the January 1, 2013, journal ent..
|