Strayer Eco470 Week 4 Chapter 5 Homework

Week 4 chapter 5 homeworkClick the link above to submit your homework.Chapter 5 Question: 5.3Problems: 5.10, 5.13, 5.14, and 5.27Problem 5.10
Based on 11 annual observations, the
following regressions were obtained:
^
Model A: Y(sub t) = 2.6911 – 0.4795X(sub t)
se = (.1216) (.1140) r^2 = .6628
^
Model B: Y(sub t) = 0.7774 – .2530 ln X(sub t)
se = (.0152) (0.0494) r^2 = 0.7448
where
Y = the cups of coffee consumed per person per day and X = the price of coffee,
dollars per pound.
a.
interpret the slope coefficients in the two models. explain specifically.
_ _
b. you are told that Y(mean) = 2.43 and X(mean) = 1.11. At these mean values, estimate the
price elasticty for model A and show work.
c.
what is the price elasticity for model B? show work
d.
from the estimated elasticities, can you say that the demand for coffee is
price inelastic? why?
e.
how would you interpret the intercept in model B? (hint take the anitlog) show
work
f.
“since the r^2 of model B is larger that that of model A, model B is
preferable to model A.” COMMENT.

Problem 5.27
Refer to Example 4.5 (Table
4-6) about education: GDP. and population for 38. countries. a. Estimate a linear
(UV) model for the data. What are the resulting equation and relevant output
values (i.e.: F statistic. t values. and R2)?
b. Now attempt to estimate
a log-linear model (where both of the independent variables are also in the
natural log format).
c. With the log-linear
model, what does the coefficient of the GDP variable indicate about education?
What about the population variable?
d. Which model is more appropriate?