For this question, use the following regression equation:

Qd = 5,000 - 15P

X

+ 50A + 3P

Y

- 4I

Where:

Qd = Quantity Demanded of X,

P

X

= Price of Good X,

A = Advertising Expenditures on Good X,

P

Y

= Price of a Competitive Good,

I = Average Monthly Income

The Standard Errors of the Regression Coefficients are:

Intercept (2,117)

Coefficient on P

X

(2.7)

Coefficient on A (15)

Coefficient on P

Y

(2)

Coefficient on I (3)

Part One:

Calculate the t-statistics for each of estimated coefficients in the regression equation and

explain what inferences can be drawn from them.

Part Two:

Calculate the t-statistics for each of estimated coefficients in the regression equation and

explain what inferences can be drawn from them.

Part Three:

If R2 of this equation is 0.25, what inference can be drawn from it?