In a hypothetical economy, high-power money is 2000 MUC and the money supply is 6000 MUC. Currently deposit ratio is estimated to be 0.
September 3, 2020
If the probability of an injury is 0.
September 3, 2020

Q1. A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product:

Q = 15,000 – 2.8 P + 150 A + 0.3 Ppc + 0.35 Pm + 0.2 Pc

(4234)   (1.29)  (175)   (0.12)        (0.17)        (0.13)

R^2 = 0.68          F= 21.25

The variables and their estimated values are:

Q = Quantity

P = Price of the basket = $7000

A = Advertising expenditures = $52000

Ppc = Average price of personal computer = $4000

Pm = Average price of minicomputer = $15,000

Pc = Average price of a leading competitor’s workstation = $8,000

(  ) the number in brackets is the standard error of estimation SEE

The t-test is = coefficient of variable/SEE

a.      Compute the elasticity of each variable.

b.     What would happen to Quantity if price (P) increased by $500

c.      What would happen to Quantity if average price of personal computer decreases by $1000.

d.     Conduct a t-test for the statistical significance of each variable. Which ones are significant at 5% level of significance.

e.     What does the value of R^2 mean for this test.

KM
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