3 5. The following regression results relate to a study of computer sales (in dollars) as a function of income(1) and season (Quarter 1 (Q1), Quarter 2 (Q2), and Quarter 3 (Q3)).VariableInterceptIncomeQ1Q2Q3Income Income in dollarsQ1=1 for quarter 1 and 0 otherwiseQ2=1 for quarter 2 and 0 otherwiseQ3=1 for quarter 2 and 0 otherwiseCoefficient4180.82-1.03-12.65-4.82Standard error1200.340.602.581.23(a) What is the interpretation of the coefficient on income? What is the interpretation of the coefficienton Q1?(b) Should we have included a dummy variable for quarter 4 in the regression? Why or why not?(c) Find an estimate for computer sales during quarter 1 when income was $20,000.

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5. The following regression results relate to a study of computer sales (in dollars) as a function of income (I) and season (Quarter 1 (Q1), Quarter 2 (Q2), and Quarter 3 (Q3)). Coefficient 418 0.82 -1.03 -12.65 -4.82 Variable Intercept Income Q1 Q2 Q3 Income Income in dollars Q1=1 for quarter 1 and 0 otherwise Q2=1 for quarter 2 and 0 otherwise Q3=1 for quarter 2 and 0 otherwise Standard error 120 0.34 0.60 2.58 1.23 (a) What is the interpretation of the coefficient on income? What is the interpretation of the coefficient on Q1? (b) Should we have included a dummy variable for quarter 4 in the regression? Why or why not? (c) Find an estimate for computer sales during quarter 1 when income was $20,000.

5. The following regression results relate to a study of computer sales (in dollars) as a function of income (I) and season (Quarter 1 (Q1), Quarter 2 (Q2), and Quarter 3 (Q3)). Coefficient 418 0.82 -1.03 -12.65 -4.82 Variable Intercept Income Q1 Q2 Q3 Income Income in dollars Q1=1 for quarter 1 and 0 otherwise Q2=1 for quarter 2 and 0 otherwise Q3=1 for quarter 2 and 0 otherwise Standard error 120 0.34 0.60 2.58 1.23 (a) What is the interpretation of the coefficient on income? What is the interpretation of the coefficient on Q1? (b) Should we have included a dummy variable for quarter 4 in the regression? Why or why not? (c) Find an estimate for computer sales during quarter 1 when income was $20,000.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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