Let yi = beta 0 + beta 1Xi + beta 3zi + ui where yi is the number of hot dogs so

Question

Let yi = beta 0 + beta 1Xi + beta 3zi + ui where yi is the number of hot dogs sold at an amusement park on a given day, Xi is the number of admission tickets sold that day, zi is the daily maximum temperature, and ui is a random error. State whether each of Xi, Zi, beta 0, beta 1, and beta 2 is a coefficient or a variable. Determine the units of beta 0, beta 1, and beta 2 and describe the interpretation of each. What are your expectations for the signs of beta 0, beta 1, and beta 2 (negative, zero, positive or unsure)? Justify your answer. Is it reasonable to allow for a non-zero intercept? Explain.

Explanation / Answer

1)yi ,xi,zi are variables B0 ,B1,B2 are coeficients 2) B0 =number of hot dogs sold B1 =number of hot dogs sold per admission ticket B2 =number of hot dogs sold per degree maximum temperature 3)B0 =0 as if no ticket sold no hot dog will be sold..,B1 ,B2 are positive as tickets increases number of hot dogs will increase and same for the temperature 4)there is non zero intercept because sell of hot dogs may depend on some other factors too

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