Question: The demand function for good X is Qdx = a + bPx + cM + e, where Px is the price of good X and

The demand function for good X is Qdx = a + bPx + cM + e, where Px is the price of good X and M is income. Least squares regression reveals that â = 8.27, bˆ = -2.14, cˆ = 0.36, δa = 5.32, δbˆ = 0.41, and δcˆ = 0.22. The R- squared is 0.35.

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

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

c. Explain, in plain words, what the R-square in this regression indicates.

Step by Step Solution

★★★★★

3.35 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The t statistics are as follows and b Since the coefficient estimate is not sta... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

288-B-E-M-E (2667).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

1. The demand function for Good X is defined as Qx = 75 - 2Px - 1.5Py where Py is the price of Good Y. Calculate the price elasticity of demand using the point formula for Px = 20 and Py = 10....

Douglas Cornfields demand function for good x is x(px, py,m) = 2m/5px. His income is $1,000, the price of x is $5, and the price of y is $20. If the price of x falls to $4, then his demand for x will...

The supply function and the demand function for the sale of a certain type of DVD player are given by S(p) = 150e0.004p and D(p) = 480e-0.003p, Where S(p) is the number of DVD players that the...

9. The demand function for good X is Qdx a bPx cM e, where Px is the price of good X and M is income. Least squares regression reveals that 5.25, sb 0.56, and sc 0.05. The R-squared is 0.24. a....

The demand function for good X is Qdx = a + bPx + cM + e, where Px is the price of good X and M is income. Least squares regression reveals that a = 5.25, b = ?? 1.36 c = ??0.14, a = ?? 6.19. a = ??...

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: a = 8 . 2 7 b = 2 . 1 4 c = 0 . 3 6 \ sigma a = 5 ....

Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 8000 - 4 P and QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities...

Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 5000 - 2 P and QSUS = -3000 + 8 P where QDUS and QSUS represent the quantities...

The extended demand function of good X is: QDX = 1400 - 20 PX - 10 PY + 0.1 M where: QDX = quantity demanded of good X, PX = Price of good X, M = Average consumer income, and PY = Price of related...

The extended demand function of good X is: QDX = 1400 - 20 PX - 10 PY + 0.1 M where: QDX = quantity demanded of good X PX = Price of good X PY = Price of related good Y (related in consumption to...

Hayes Company manufactures two products, A and B. Actual year-end data regarding the two products follow: Direct Labor Hours Product per Total Direct Production Labor Hours Annual Unit A 1.8 5,000...

The linear transformation S: C4 C3 is not surjective. Find an output w C3 that has an empty pre-image (that is S-1 (w) = .) 2I 1-

XYZ Corp has current assets of $100,000, Current liabilities of $75,000 and inventory of $15,000. How much is its quick ratio? 1.33 l1.0 l0.33 1.13

Provide the general outline of existing risk-based capital requirements. Is there a difference between default risk, interest rate risk, and liquidity risk?

Two months ago, the owner of a car dealership (and a current football star) significantly changed his sales managers compensation plan. Under the old plan, the manager was paid a salary of $6,000 per...

1. What is the value of a preferred stock that pays a perpetual dividend of $75 at the end of each year when the interest rate is 4 percent? 2. Levi Strauss & Co. paid $46,532 for a 110-year-old pair...

The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name Y. Good Y is an inferior good. a. How will the...

Please answer 5. Suppose that a null hypothesis is, in fact, true. And suppose that a Type I error was made in a hypothesis test. What was the decision that was made? [Circle your answer.] (3 pts)...

#Computer Architecture and Organization Convert the following numbers into binary numbers and preform the operations. Show all your working? a) 107 10 + (- 2 10 ) b) 133 10 - 90 10 c) 11 10 x 5 10...

A division of a large corporation is considering the purchase of a new tunneling X-ray microscope for $370,125. The projected net benefits from gains in materials engineering is projected to be...