You work for Segway, in the sales division of the One S1 (which is basically a m

Question

You work for Segway, in the sales division of the One S1 (which is basically a motorized unicycle without the seat). You’ve collected data on monthly sales (S) and the price of the One S1 (P), both in dollars, as well as the daily average summer temperature in your most popular market (T) in degrees Fahrenheit. You estimate the following regression model:

S=a+bP+cT

In your regressions, you usually look for a 10%-or-better level of confidence.

Question 11

Answer saved

Marked out of 1.00

Remove flag

Question text

The expected sign of

Select one:

a. b is positive and c is negative.

b. b is positive and c is positive.

c. b is negative and c is negative.

d. b is negative and c is positive.

Information

Flag question

Information text

Your regression yields the following results:

Dep. Var.: S
Adj. R-square 0.759

Variable

Coefficient

Standard Error

t-stat

P-value

Intercept

62741

7912

7.930

0.00051

P

-49.79

10.22

-4.872

0.00459

T

-32.84

58.60

-0.561

0.59931

Question 12

Answer saved

Marked out of 1.00

Remove flag

Question text

The estimated coefficient for a (intercept) suggests that

Select one:

a. Sales will be $62,741 per month when P and Tare at their optimal values.

b. If P and T are zero, we could still expect about $62,741 in sales per month.

c. Sales will range between $7,912 and $62,741 per month, but not outside those limits.

d. a cannot be interpreted with confidence since its parameter estimate is not statistically significant.

Question 13

Answer saved

Marked out of 1.00

Remove flag

Question text

The estimated coefficient for b (price of the One S1) suggests that

Select one:

a. a $1 increase in the price of the One S1 is associated with a decrease of monthly sales of $49.79.

b. when price is close to $49.79, then consumers will demand one more unit per month if price drops by $10.22.

c. monthly sales will increase by $10.22 if the price of the One S1 decreases by $49.79.

d. a one-dollar increase in price is associated with an increase in monthly sales of 10.22 units.

Question 14

Answer saved

Marked out of 1.00

Remove flag

Question text

The estimated coefficient for c (daily average summer temperature) suggests that

Select one:

a. a one-degree increase in temperature is associated with a $32.84 increase in monthly sales.

b. temperature has a more important effect on our sales than does the price of our units, since c>b.

c. a one-degree increase in temperature is associated with a $32.84 decrease in monthly sales.

d. a one-degree increase in temperature is associated with a $58.60 increase in price.

Question 15

Answer saved

Marked out of 1.00

Remove flag

Question text

The price of the One S1 has a statistically significant effect on our sales.

Select one:

True

False

Question 16

Answer saved

Marked out of 1.00

Remove flag

Question text

Daily average summer temperature affects the sales of the One S1 in a statistically significant way.

Select one:

True

False

Question 17

Answer saved

Marked out of 1.00

Remove flag

Question text

What portion of the total variation in sales of the One S1 remains unexplained?

Select one:

a. 0.759, or 75.9%

b. 10.22%

c. 49.79%

d. 0.241, or 24.1%

Question 18

Not yet answered

Marked out of 1.00

Remove flag

Question text

Segway is considering selling the One S1 in a new city, where the average daily summer temperature is 75°, for a price of $580. What level of sales would you expect in this new city (rounded to the nearest dollar)?

Answer:

Variable

Coefficient

Standard Error

t-stat

P-value

Intercept

62741

7912

7.930

0.00051

P

-49.79

10.22

-4.872

0.00459

T

-32.84

58.60

-0.561

0.59931

Explanation / Answer

11. The correct answer is: c)

Reason: both price and temperature owes to be inversely related to monthly sales.

12. The correct answer is: b)

Reason: intercept of a regression equation basically tells the average value of dependent variable when all the independent variables are zero.

13. The correct answer is: a).

Reason: estimated coefficient for b is nothing but the change in monthly sales due to one unit change in price.

14. The correct answer is: c)

Reason: same as in 13. As temperature increases by one unit, the monthly sales falls by 32. 84 units as the coefficient is negative.

P.S.: As per Chegg's policy, if nothing is mentioned then only the first four questions needs to be answered.

Thanks!

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.