1) Based on 11 annual observations, the following regressions were obtained: Model A: Y =2.6911-0.4795 X, SE=(0.1216) (0.1140) R2 = 0.6628 Model B: In Y,=0.7774-0.2530ln X, SE= (0.0152) (0.0494) R- = 0.7448 Where Y = the cups of coffee consumed per person per day and X = the price of coffee in dollars per cup. a) Interpret the slope coefficients in the two models. b) You are told that Y=2.43 and *=1.11 . At these mean values, estimate the price elasticity for Model A. c) What is the price elasticity for Model B? d) From the estimated elasticities, can you say that the demand for coffee is price elastic? e) How would you interpret the intercept in Model B? (Hint: take the antilog) Since the R' of Model B is larger than that of Model A, Model B is preferable to Model A. Comment on this statement