What is the predicted change in the sales quantity of tires

Assignment Help Econometrics

Reference no: EM13245704

he following regression was estimated for 45 quarters to test the hypothesis that tire sales (T) depend on new-automobile sales (A) and total miles driven (M)
T = 0.45 + 1.41 (M) + 1.12 (A)
(0.32) (0.19) (0.41)
Where T is the % change in tire sales, M is the % change in miles driven, and A is the % change in new automobile sales. N=23, and R square = 0.83, the standard error of the regression = 1.2 and standard errors for the coefficients are listed in parentheses.

a) does the regression equation and its coefficients make economic sense? Explain.

b) Suppose "miles driven" is expected to fall by 2% and new auto sales to fall by 13% (due to forecast recession). What is the predicted change in the sales quantity of tires? If actual tire sales dropped by 18% would this be surprising?

Reference no: EM13245704

Questions Cloud

Can the policy be consistent with profit maxamization : A New Hampshire resort offers year round activities: in winter, skiing and other cold weather activities and in summer, golf, tennis, and hiking. The resort's operating charges are essentially the same winter and summer.

Compute how much energy in the form of heat : Calculate how much energy in the form of heat is available from 100mL of this mixture and compare it with the amount available from pure gasoline

Explain overall flux oxaloacetate through gluconeogenesis : There are two sources of oxaloacetate for entry into gluconeogenesis. how could you experimentally determine the relative contribution of each of these sources to the overall flux oxaloacetate through gluconeogenesis? Draw out your experiment.

How much current flows through one of the 10 resistors : If one resistor of a particular size is connected to a battery, 2.5A flow from the battery, How much current flows through one of the 10 resistors

What is the predicted change in the sales quantity of tires : Suppose "miles driven" is expected to fall by 2% and new auto sales to fall by 13% (due to forecast recession). What is the predicted change in the sales quantity of tires If actual tire sales dropped by 18% would this be surprising

Should the airline carry freight for the local firm : suppose the airline is offered $4,000.00 per week to haul freight along the route for a local firm. This will mean replacing one of the weekly passenger flights with a freight flight (at the same operating cost). Should the airline carry freight f..

Explain the newly entering acetyl group from the breakdown : How would you experimentally demonstrate whether the newly entering acetyl group from the breakdown of glucose is or is not the carbon oxidized in the citric acid cycle? Show your work and draw out experiment.

Find the heat required to melt the bullet : A 3.00 g lead bullet traveling at 650 m/s strikes a target, converting its kinetic energy into thermal energ, Find the heat required to melt the bullet

Compare quantities demanded between the old and new bundles : Suppose that the price of good x rises and price of good Y falls in such a way that the consumer's new optimal consumption bundle lies on the same indifference curse as his old bundle. Compare the quantities demanded between the old and new bundle..

User Account

All Pages