09/13/2015

QUESTION1:Aquantjockfromyourfirmusedalineardemand
specificationtoestimatethedemandforitsproductandsentyouahardcopy
oftheresults.Unfortunately,someentriesaremissingbecausethetonerwas
lowinherprinter.Usetheinformationpresentedbelowtofindthemissing
values.Then,answertheaccompanyingquestions.
Instructions: Do not round intermediate calculations. Round
only your final calculation. Round your final answers to 2 decimal
places. Include a minus (-) sign for all negative answers.

SUMMARY
OUTPUT
Regressio
n Statistics
0.
Multiple R
R Square
Adjusted R
Square
Standard
Error
Observatio
ns

38
'1'
'2'
20
.77
15
0

Analysis
of Variance
D
egrees
of
Fr
eedom
Regression
Residual

Sum
of
Squares

2
14
7

'3'
63,4
08.62

Me
an
Square
51
99.43
43
1.35

2.05

73,8
Total

Intercept
Price of X
Income
(000s)

'4'
C
oefficie
nts
58
.87
1.64
'7'

07.49

Stan
dard Error

t
Stat

-value
3.8

'5'

0.85
0.24

.00
'6'
4.6

.06
.00

a.Basedontheseestimates,writeanequationthatsummarizesthe
demandforthefirmsproduct.
Instructions: Round your responses to 2 decimal places. Do
not round intermediate calculations. Round only your final calculation.
QXd=PX+M
Pleasewritecompletethisequation.
b.Whichregressioncoefficientsarestatisticallysignificantatthe5
percentlevel?
QUESTION2:ThedemandfunctionforgoodXislnQXd=a+blnPX+clnM+
e,wherePxisthepriceofgoodXandMisincome.Leastsquaresregression
revealsthat:
= 7.42 b^ =-2.18 c^ =0.34
a.IfM=55,000andPx=4.39,computetheownpriceelasticityofdemandbased
ontheseestimates.Determinewhetherdemandiselasticorinelastic.
Ownpriceelasticityofdemand:?
Demandis?
b.IfM =55,000andPx=4.39,computetheincomeelasticityofdemandbasedon
theseestimates.DeterminewhetherXisanormalorinferiorgood.
Incomeelasticityofdemand:?
Xis?