Question: Answer all questions. Your answers will be evaluated for accuracy, clarity and thoroughness. Based on quarterly observations for the US, you estimate the demand function

Answer all questions. Your answers will be

Answer all questions. Your answers will be evaluated for accuracy, clarity and thoroughness. Based on quarterly observations for the US, you estimate the demand function for coffee. Your results are below. lnQ=1.280.165lnPCstd.err.n=32+0.515lnI+0.148lnPT(0.08)R2=0.74(0.25)(0.55) Q= pounds of coffee consumed per capita Pc= price of coffee per pound P= price of tea per pound I - per capila disposable income in thousands of dollars 1. Develop and test appropriate hypotheses for significance of individual coefficients at 5 percent level of significance. Give an economic interpretation of your coefficients. 2. Is coffee price elastic? Please conduct a t-test of your answer. 3. Do you think this is a good regression? Why or why not

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