Scenario 2.

Below isa multiple regressionin which the dependent variable is the quantity demanded, Qx, of movie tickets at the the theatre, and the independent variables are, Px is the movie ticket price in dollars, Py is the price of a redbox DVD rental in dollars, I is income in dollars, and ADV is advertising expenditures in dollars.

Qx = 11,600 - 5,000 Px + 3,500 Py + 35 I + 1,000 ADV

The regression was estimated for 62 movie outlets.

REGRESSION SUMMARY OUTPUT

Regression Statistics

R Square0.5557

Adjusted R Square0.5329

Standard Error7211.848

Observations62

CoefficientsStandard Error

Intercept11,6005050.9

Px-5,0001,001.5

Py3,5001,750

I3519.5

ADV1,000333

13) Refer to Scenario 2. What percentage of the variation in the dependent variable, the quantity demanded, is explained by the regression model?

A) not enough information provided.B) 53.29% C) 72.1%D) 55.57%

14) Refer to Scenario 2. By examining the t-statistics associated with the regression coefficients, at the 5 percent significance level, which of theindependent variables is statistically different from zero (i.e., statistically significant at the 5% level)?

A) Only Px and Py are statistically significant at the 5% level.

B) Can't tell since the t-stats for each independent variable are not provided to me.

C) Px, Py, and ADV are statistically significant at the 5% level but not I.

D) all independent variables are statistically significant at the 5% level.

15) Refer to Scenario 2. If Py increases by $2, all else constant, what is the impact on the quantity demanded of x?

A) it will decrease by 3,500 units.B) it will increase by 7,000 units.

C) it will decrease by 7,000 units.D) it will increase by 3,500 units.

16) Refer to Scenario 2. When Px = $6, Py = $2, I = $40, and ADV = $20, the point price elasticity of demand equals:

A) -6.0B) -3C) -0.333D) -0.167

17) Refer to Scenario 2. When Px = $6, Py = $2, I = $40, and ADV = $20, the advertising point elasticity of demand equals:

A) 2.0B) 4.0C) -4.0D) -2.0