Calculate t-statistics for each variable and explain what this tells you
What will be an ideal response?
Price: -10/2.29 = -4.37
Advertising: 5/1.36 = 3.86
Competitor's price: 4/1.75 = 2.29
Income: 0.05/1.5 = 0.33
All variables are statistically significant with the exception of income. Thus we can conclude that the other variables do have an impact on the quantity demanded of this good.
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Refer to Scenario 25-2. As a result of Kristy's deposit, Bank A can make a maximum loan of
A) $2,000. B) $8,000. C) $10,000. D) $50,000.
Consider that you are a government economist asked by a state legislature to apply excise taxes to a variety of goods sold in your state. You know you want to minimize the excess burden of taxation so you apply the Ramsey Rule
This means that you tell the legislature to _____. a. set the tax rates proportional to the elasticities of demand for each good b. set the tax rates in inverse proportion to the elasticities of demand for each good c. set the tax rates proportional to the elasticities of supply for each good d. set the tax rates in inverse proportion to the elasticities of supply for each good