Answer the following question(s) based on the following regression equation (Standard errors in parentheses, n = 150):

QD= 1000 - 50PA+ 10PB+ .05I, (20) (7) (.04)

where QD= quantity demanded of good A, PA= price of good A, PB= price of a competing good B, and I = per capita income.

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17) For which of the following variables should a "two tail" t-test be applied?

A) PA

B) I

C) PB

D) Should be applied for all.

18) For the regression equation Q = 100 - 10X + 0.25X2, which of the following statements is true?

A) X2is the more important variable because it is positive.

B) When X decreases by one unit, Q decreases by 10 units.

C) When X increases by 10 units, Q decreases by 1 unit.

D) The change in Q associated with a one unit increase in X depends on the initial level of X.