Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 9, Problem 15RQ
How is the
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Suppose you are working as a manager of an organic grocery store and want to analyze how
income affects grocery spending.
In the dataset, grocery_spending measures the amount spent on groceries in dollars,
and income represents individual income, also measured in dollars. The following
regression results present estimates from two different specifications.
reg grocery_spending income
Source
SS
df
MS
Model
Residual
20685432.5
29227282.9
1 20685432.5
9,998 2923.31295
Number of obs =
F(1, 9998)
Prob > F
R-squared
=>
10,000
7076.02
0.0000
Total
49912715.4
9,999 4991.77071
Adj R-squared =
Root MSE
=
0.4144
54.068
grocery_sp~g
Coefficient Std. err.
t
P>|t|
[95% conf. interval]
income
_cons
0033984 .0000404 84.12
2113.24 1.144063 1847.14
0.000
0.000
.0033192
2110.998
.0034776
2115.483
⚫ gen Inincome-In (income)
.reg grocery_spending Inincome
Source
SS
df
MS
Number of obs = 10,000
Model
Residual
24748934.7
25163780.7
9,998
1 24748934.7
2516.88144
F(1, 9998)
Prob > F
R-squared
=
9833.17
"
=…
Both the level-level and level-log regression models presented above use the same number of observations. What does this suggest about the variables used in each model?
Calculate the R-squared value for the missing section. (Round totwo decimal places. You do not need to show your work.) Based on this answer, which model specification provides a better fit to the data? Why?
On the level-level model specification, what is the null hypothesiswe would like to reject? Briefly describe the null hypothesis in words.
Chapter 9 Solutions
Principles of Economics 2e
Ch. 9 - Classify the following as a government-enforced...Ch. 9 - Classify the following as a government-enforced...Ch. 9 - Suppose the local electrical utility, a legal...Ch. 9 - If Congress reduced the period of patent...Ch. 9 - Suppose demand for a monopolys product falls 50...Ch. 9 - Imagine a monopolist could charge a different...Ch. 9 - How is monopoly different from perfect...Ch. 9 - What is a barrier to entry? Give some examples.Ch. 9 - What is a natural monopoly?Ch. 9 - What is a legal monopoly?
Ch. 9 - What is predatory pricing?Ch. 9 - How is intellectual property different from other...Ch. 9 - What legal mechanisms protect intellectual...Ch. 9 - In what sense is a natural monopoly natural?Ch. 9 - How is the demand curve perceived by a perfectly...Ch. 9 - How does the demand curve perceived by a...Ch. 9 - Is a monopolist a price taker? Explain briefly.Ch. 9 - What is the usual shape of a total revenue curve...Ch. 9 - What is the usual shape of a marginal revenue cuwe...Ch. 9 - How can a monopolist identify the...Ch. 9 - How can a monopolist identify the...Ch. 9 - When a monopolist identifies its profit-maximizing...Ch. 9 - Is a monopolist allocatively efficient? Why or why...Ch. 9 - How does the quantity produced and price charged...Ch. 9 - ALCOA does not have the monopoly power it once...Ch. 9 - Why are generic pharmaceuticals significantly...Ch. 9 - For many years, the Justice Department has tried...Ch. 9 - Intellectual property laws are intended to promote...Ch. 9 - Imagine that you ale managing a small firm and...Ch. 9 - If a monopoly firm is earning profits, how much...Ch. 9 - Return to Figure 9.2. Suppose P0 is 10 and P1 is...Ch. 9 - Draw the demand curve, marginal revenue, and...Ch. 9 - Draw a monopolists demand curve, marginal revenue,...
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