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Use the following information to solve questions 2 and 3. A farmer has 2 data points regarding the price and quantity demanded of tomatoes that
Use the following information to solve questions 2 and 3. A farmer has 2 data points regarding the price and quantity demanded of tomatoes that he wants to use to calculate a linear relationship between the 2 variables. He observes that when the price of tomatoes is $2/lb the quantity demanded is 15lb. On the other hand, when the price of tomatoes decreases to $1/lb, the quantity demanded becomes 201b. Based on these 2 points, the farmer wants to calculate the equation of a straight line of the form price = a + b Quantity, where a and b are the y-intercept and slope, respectively. Question 4 10 pts Which of the following statements is correct? A dummy variable is used to estimate nonlinear quadratic relationships between 2 variables A dummy variable can only take two values (0 and 1) A dummy variable can only be used as the dependent variable in a regression None of the answers are correct A dummy variable can only be used to estimate negative relationships between 2 variables
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