Question

1) A regression analysis between demand (y in 1,000 units) and price (x in dollars) resulted in the following equation.

ŷ = 8 − 5x

The above equation implies that if the price is increased by $1, the demand is expected to

a) increase by 3 units. b) decrease by 5 units.    c) decrease by 5,000 units. d)decrease by 3,000 units.

2) The following information regarding a dependent variable (y) and an independent variable (x) is provided.

y	x
6	2
5	3
6	4
6	5
9	6

SSE = 4.3

SST = 9.2

What is the least squares estimate of the y-intercept?

a) 0.7 b)3.6    c)4 d)6.4

3)The following information regarding a dependent variable (y) and an independent variable (x) is provided.

y	x
6	2
7	3
6	4
8	5
7	6

SSE = 1.9

SST = 2.8

What is the least squares estimate of the slope?

a) 0.3    b) 4    c) 5.6 d) 6.8

Answer 1

1. Slope = -5

So

The above equation implies that if the price is increased by $1, the demand is expected to decrease by 3000 units

2. The statistical software output for this problem is:

Hence,

y - Intercept = 3.6

Option B is correct.

3. Slope = 0.3

Option A is correct.