Economics Questions

Quiz #2 1. Suppose you are given the following simple dataset: X 2 8 9 13 Regress Y on X and you get: Y 5 9 12 18 Y = aˆ + bˆX 1) Which variable is the independent variable? Which one is the dependent variable? (5pts) 2) Calculate â and b̂ using the formulas below. Must show your work. (15pts)  ( X i − X )(Yi − Y ) bˆ =  ( X i − X )2 aˆ = Y − bˆX 2. Suppose demand for a product is determined by its price, consumers’ income, and the price of a related good. Use Q for demand, P for price, M for income, and PR for price of related good. The demand function is estimated using regression analysis. The results are reported below: SUMMARY OUTPUT 1 Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.744152135 0.553821042 0.459552605 530.2842631 80 Intercept P M PR Coefficients 125.56 -6.32 0.035 -9.89 Standard Error 15.87 4.17 t Stat P-value ??? 0.051 2.21 1) What is the R 2 of this regression? (5pts) 2) What is the degrees of freedom of this regression? (5pts) 3) What is the effect of a one-dollar increase in price (P) on demand (Q)? (5pts) 4) What is the effect of a one-dollar increase in income (M) on demand (Q)? (5pts) 5) What is the effect of a one-dollar increase in price of related good (PR) on demand (Q)? (5pts) 6) Calculate the t Stat (or t ratio marked with “???” in the table) for the coefficient on P? (5pts) 7) Test whether the effect of P on Q is significant at the 5% significance level using the t stat you just calculated. Show your work. (5pts) 8) Using the p-value 0.051 in the table, test if the effect of M on Q is significant at the 5% significance level. (5pts) 9) Using the values P=100, M=35,000, and PR=40, predict the demand (Q)? (5pts) 10) Using the value of predicted Q you just calculated for part 9), calculate the estimates of P The price elasticity of demand ( Eˆ = bˆ  ). Show your work. (5pts) Q 2 The income elasticity of demand ( Eˆ M = cˆ  M ). Show your work. (5pts) Q PR The cross-price elasticity of demand ( Eˆ XR = dˆ  ). Show your work. (5pts) Q 3. Suppose the following is an estimated log-linear demand function: ln Q = 12 – 3.68 ln P – 0.59 ln M + 2.66 ln PR All parameter estimates are significant. 1) Is this good a normal or an inferior good? (5pts) 2) Is this good a complement of or substitute for the related good? (5pts) 3) What is the price elasticity of demand for this good? (5pts) 4) What is the income elasticity of demand for this good? (5pts) 3

Economics Questions

We offer the best custom writing paper services. We have answered this question before and we can also do it for you.

GET STARTED TODAY AND GET A 20% DISCOUNT coupon code DISC20

We offer the bestcustom writing paper services. We have done this question before, we can also do it for you.

Why Choose Us

  • 100% non-plagiarized Papers
  • 24/7 /365 Service Available
  • Affordable Prices
  • Any Paper, Urgency, and Subject
  • Will complete your papers in 6 hours
  • On-time Delivery
  • Money-back and Privacy guarantees
  • Unlimited Amendments upon request
  • Satisfaction guarantee

How it Works

  • Click on the “Place Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
  • Fill in your paper’s requirements in the "PAPER DETAILS" section.
  • Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
  • Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
  • From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.