Answer to Question #74293 in Microeconomics for Zulfiqar Ali
Data from 20 cities were used to estimate the demand for face-lifts. The resulting regression equation was
Qd = 50.000 - 0.001P + 0.002/ R2 = 0.55
(5.42) (-2.34) (2.00)
where Qd is face-lifts per 1,000 population per year,P is the price in rupess,I is income in rupees,and the t-statistics are shown in parentheses,.
(a) In determining statistical significance of the coefficients,what number should be used for degrees of freedom ?
(b) which of the coefficients are statistically significant at the 5 percent level ?
(c) The mean value of P and I are Rupees 5,000 and Rs. 20,000, respectively. Computer the point price elasticity of demand.
(d) what is the predicted demand at the mean values of the independent variables?