Estimate the price elasticity of dem

Question

1.  Ignoring the intercept, which of the variables appears to be the most significantly different from zero?

1. Price of Natural Gas 
2. Income  
3. Own price
4. Customers 

2. Which of the following is most likely represents the upper 95% confidence limit for when sales are estimated from the equation?

1. 16,759 (i.e. the parameter standard error estimates sum)
2. 11,855 (i.e., the estimated standard error) 
3. 28,575 (i.e., the sum of the parameter estimates)
4. 23,710 (i.e. double the estimated standard error)

3. Estimate the (own) price elasticity of demand. Assume the following: own price is $3, income is $60,000, the market has 1,000,000 potential customers and the price of natural gas is $4. (The following numbers are absolute values.)

1. 48
2. 72 
3. 57
4. 9937 (the slope coefficient)

4. Assuming price is $3, income is $60,000, the market has 1,000,000 potential customers, and the price of natural gas is $4, estimate the cross-price elasticity (of demand).

1. 14.
2. 80
3. 21
4. 35

5. In general which of the following statements best describes the retail market for electricity?

1. The electricity market is not highly price sensitive 
2. A rise in the price of electricity will increase firm revenues.
3. Electricity is a normal good.
4. All of the above.