Assume your research staff used regression analysis to estimate the industry dem

Question

Assume your research staff used regression analysis to estimate the industry demand curve for Product X.
Qx = 10,000 - 100 Px + 0.5 Y - 1000 r
(3,000) (20) (0.3) (105)


Where Qx is the quantity demanded of Product X, Px is the price of X, Y is income, and r is the prime interest rate (given in decimals, e.g., 0.02 or 0.05) The standard error of each estimated coefficient is given in parentheses below it.
Also, the following information is provided about the regression equation.
Number of observations = 98
R2 = 0.95
F-statistic = 7.5

Perform an F test at the 5% level of the overall explanatory power of the model.

Explanation / Answer

Hypothesis is

Ho: No relationship be Qx and the three independent variables in the model

H1: There is one relation

F(0.05, 3, 96) = 2.68,

since

F = 7.5 > 2.68

we can reject the null hypothesis.

Thus, there is no relation between Qx and the three independent variables in the model

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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