(b) Determine th Give an economic interpretation of the estimated slope (b) coefficient. (c) Determine if distance is a statistically significant variable in estimating sales. (d) Calculate the coefficient of determination. (e) Construct an approximate 95% prediction interval for the sales if the nearest competitor locates at a distance of 3.5 Km. (f) Use both your economics and statistical knowledge to discuss how the model could be improved. Using the available data, propose at least one model that you think it is better than the one used by the shop owner. Run the model and discuss its results. Discuss briefly if the model is effectively better than the one originally proposed by the shop owner. Exercise 2 Monthly sales (x $100,000) of the South Pole Ice Cream Company are shown in the table below: Month 1990 1991 1992 January 2.3 2.54 3.3 February 2.6 2.8 3.31 March 2.75 3 3.78 April 2.85 3.43 4.2 May 3.25 3.85 4.2 June 3.37 3.9 5 July 3.25 3.8 August 3.37 3.9 September 3.2 3.6 October 3.2 3.55 November 2.75 3.25 December 2.65 3.2 (a) Plot the data on a graph with time on the horizontal axis and sales on the vertical axis. (b) Fit a linear trend equation to the data. (c) Introduce an appropriate number of (significant) dummy variables and regress sales on time and the dummy variables. (d) On the basis of your model in part (c) forecast sales for the missing months in the above table, and determine an approximate 95% confidence interval for sales in December 1992. (e) Calculate seasonally adjusted monthly sales by the ratio to trend method for the last six months of 1992. Bear in mind that you have to use the regression model of part (b) for forecasting the sales that need to be adjusted