The demand for roses Table 4 gives quarterly data on these variables: Y = quantity of roses sold, dozens X2 = average wholesale price of roses, $/ dozen X3 = average wholesale price of carnations, $/ dozen X4 = average weekly family disposable income, $/ week X5 = the trend variable taking values of 1, 2, and so on, for the period 1971III to 1975II in the Detroit metropolitan area You are asked to consider the following demand functions: Yt = 1 + 2X2t + 3X3t + 4X4t + 5X5t + ut ln Yt = 1 + 2 ln X2t + 3 ln X3t + 4 ln X4t + 5X5t + ut a. Estimate the parameters of the linear model and interpret the results. b. Estimate the parameters of the log-linear model and interpret the results. c. How would you compute the own-price, cross-price, and income elasticities for the linear model? d. Compute the multiple coefficient of determination and interpret it.

Yt = 1 + 2X2t + 3X3t + 4X4t + 5X5t + ut

ln Yt = 1 + 2 ln X2t + 3 ln X3t + 4 ln X4t + 5X5t + ut

a. Estimate the parameters of the linear model and interpret the results.

b. Estimate the parameters of the log-linear model and interpret the results.

c. How would you compute the own-price, cross-price, and income elasticities for the linear model?

d. Compute the multiple coefficient of determination and interpret it.