1) Calculate the elasticity for each variable and briefly comment on what information this gives you...
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1) Calculate the elasticity for each variable and briefly comment on what information this gives you in each case. 2) Calculate t-statistics for each variable and explain what this tells you. 3) How is the R2 value calculated, and what information does this give you? 4) How would you evaluate the quality of this equation overall? Do you have any concerns? Explain. 5) When would you use a one-tailed rather than a two-tailed t-test when checking significance levels? 6) Should this firm be concerned if macroeconomic forecasters predict a recession? Explain. R2 = 0.65 N = 120 F = 35.25 Q = 8,400-10 P + 5 A + 4 Px + 0.05 I, (1,732) (2.29) (1.36) (1.75) 0.15) Standard error of estimate = 34.3 Q = Quantity demanded P = Price = 1,000 A = Advertising expenditures, in thousands = 40 PX price of competitor's good = 800 I = average monthly income = 4,000 1) Calculate the elasticity for each variable and briefly comment on what information this gives you in each case. 2) Calculate t-statistics for each variable and explain what this tells you. 3) How is the R2 value calculated, and what information does this give you? 4) How would you evaluate the quality of this equation overall? Do you have any concerns? Explain. 5) When would you use a one-tailed rather than a two-tailed t-test when checking significance levels? 6) Should this firm be concerned if macroeconomic forecasters predict a recession? Explain. R2 = 0.65 N = 120 F = 35.25 Q = 8,400-10 P + 5 A + 4 Px + 0.05 I, (1,732) (2.29) (1.36) (1.75) 0.15) Standard error of estimate = 34.3 Q = Quantity demanded P = Price = 1,000 A = Advertising expenditures, in thousands = 40 PX price of competitor's good = 800 I = average monthly income = 4,000
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1 Calculating the elasticity for each variable Price elasticity EP 10 1000 8400 119 This indicates that the demand is elastic meaning a 1 change in price would result in a greater than 1 change in qua... View the full answer
Related Book For
Accounting for Governmental and Nonprofit Entities
ISBN: 978-1259917059
18th edition
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely
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