The demand function for good X is QXd = a + bPX + cM + e, where Px is the price of good X and M is income. Least squares regression reveals that:The R-squared is 0.35.
a. Compute the t-statistic for each of the estimated coefficients.
Instruction: Round your answers to the nearest 2 decimal places.
b. Determine which (if any) of the estimated coefficients are statistically different from zero. Select one:
- The coefficient estimate for c is statistically different from zero.
- The coefficient estimate for b is statistically different from zero.
- The coefficient estimates for b and c are statistically different from zero.
- The coefficient estimates for a and c are statistically different from zero.
c. What does the R-square in this regression indicate? Select one:
- 35 percent of the variability in income is explained by price.
- 35 percent of the variability in the dependent variable is explained by price and income.
- 65 percent of the variability in the dependent variable is explained by price and income.
- 35 percent of the variability in price is explained by income.