7. If a person's income is $40,000, how much do you predict that they will spend on consumption? 8. The R-squared, or coefficient of determination, from this regression is 0.844. Interpret the R-squared.

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Setting:  U.S. Auto manufacturers are trying to develop a multivariate function with which to estimate the demand for their gas-electric hybrid compact cars.  Here is one that Motors General developed for its Jolt:   Qj = 65000 – 20Pj + 20Pf + 35Pt – 5Pb + 0.2Tc + 0.05Y + 10Mg + 0.04A Where Qj  = the number of Jolts demanded per week. Pj  = the price of each new Jolt (in $). Pf = the price of each new Ford gas-electric hybrid (in $). Pt = the price of each new Toyota gas-electric hybrid (in $). Pb = the price of replacement batteries for the Jolt (in $). Tc = the amount of  tax credit incentive offered with the purchase of a new hybrid (in $). Y  = average weekly disposable income of a typical Jolt purchaser (in $). Mg = the miles per gallon of gas rating of the Jolt (in miles per gallon). A  = average weekly Jolt advertising expenditure (in $).   6 If all variables remain unchanged except that the price of the Toyota hybrid (Pt) decreases by $500, then the demand for Jolts will:   7…

Econometrics   Thomas Eisensee and David Stromberg wanted to measure how much news coverage of a foreign disaster impacted the amount of disaster relief provided by the U.S. government. They argue that the simple relationship would be biased.   Let X = Minutes of News Coverage and Y= Disaster Aid. Choose a variable X2 that could bias the simple relationship. This variable should impact the amount of coverage and impact the amount of aid for reasons other than purely news coverage.    Eisensee and Stromberg introduce an instrument Z = During the Olympics. Explain how Z could satisfy the relevant and exogenous criteria.    Explain how you could use Z to estimate the impact of X on Y free from X2 bias. Hint: you should mention two stages.

How would you describe a correlation of -1? Group of answer choices There is a perfect linear relationship between x and y. There is a strong positive relationship between x and y. There is no relationship between x and y. There is a weak negative relationship between x and y. thanks

14. Estimating the variance of the error term Suppose you are interested in looking at the determinants of a worker's wage, and use the following econometric model to do so:  wage=β0+β1 educ+u wage=β0+β1 educ+u   where   educ = years of education   u = error term     You take a sample of 120 individuals and collect data on each person's wage and level of educational attainment.   An unbiased, observable estimator of the variance of the error term (σ2?2) is σˆ2?^2

Suppose you run a regression with quantity as your dependent variable and advertising as one of your independent variables. The p-value on advertising is .08. The marketing team is arguing that their advertising efforts are impacting sales, but the finance/economics department is arguing that there isn't evidence that the advertising is impacting sales. What side would you take and why?

18 Given that the sum of the squared deviations of EDUC is  9025.6   The standard error of the slope coefficient is ________.   a 0.1524           b 0.1249           c 0.1024           d 0.0839

If you are interested in investigating themarginal effect of the percentage change of lot size on the changeof house price, then in your linear regression analysis you should apply thelogarithm transformation on: Select one: a. The house price variable. b. Both the house price variable and the lot size variable. c. The lot size variable. d. The bedroom variable. e. Both the bedroom variable and the house price variable.