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 â

5.25, sb ˆ 0.56, and scˆ 0.05. The R-squared is 0.24.

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.

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A 1 SUMMARY OUTPUT 2 Regression Statistics B C D E F G 3 4 Multiple R 0.62 5 R-Square '1' 67 Adjusted R-Square '2' Standard Error 190.90 8 Observations 100.00 9 10 Analysis of Variance 11 Degrees of Freedom Sum of Squares Mean Square F 2.00 '3' 97.00 3,535,019.49 '4' 5,758,037.26 12 Regression 13 Residual 14 Total 15 16 Coefficients Standard Error t-Statistic P-Value Lower 95% 17 Intercept 187.15 '5' 0.35 0.73 -880.56 Upper 95% 1,254.86 18 Price of X -4.32 0.69 '6' 0.00 -5.69 -2.96 19 Income '7' 0.02 4.47 0.00 0.05 0.14 1,111,508.88 30.50 Significance F 0.00 36,443.50