5. The following regressien sodel mas oeve lopes by Teyets ot Terrance. parketin

Question

5. The following regressien sodel mas oeve lopes by Teyets ot Terrance. parketing researcher 4.50 LPricehonda0.45 LPPicegasoline where the variables are in logarithmic fors which of the followingis true: a. if incose goes up by 1 unit, quantity wili go up by .25 b. ir the price of a Honda goes up by one unit, Toyota sasle up by 5.25 units. increase by 4.50 unitr c. if the price of a Honda goes up by one unit, Toyota sales will go up by 0.45 units autocorrelation can be expected to increase by 15.0 d. the Durbin-natson statistie indicates a small measure of positive e. if the advertising budget increases 10.0, the asount of Toyota sales 6. For Y x) use the following set of data to calculate , Show all calculation in the space provided: 10 . If the regressors are highly correlated anong thenselves, we refer to this as the problem of: a. autocorrelatiorn b. multicollinearity c. heteroscedasticity d. simultaneous equation bias e. regressor externality

Explanation / Answer

5. The correct answers are D and E.

6. B1 = Ybar -B2 Xbar= -4, B2=rSy/Sx=4.5. Here we have Xbar as the mean of X, Y bar as the mean of Y, Sy and Sx are ths standard deviations and r is the correlation.

7. The correct answer is B.

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