Using a Sample of 100 Consumers,a Double-Log Regression Model Was

question 12

Multiple Choice

Using a sample of 100 consumers,a double-log regression model was used to estimate demand for gasoline.Standard errors of the coefficients appear in the parentheses below the coefficients.
Ln Q = 2.45 -0.67 Ln P + .45 Ln Y - .34 Ln P_cars
(20) (.10) (.25)
Where Q is gallons demanded,P is price per gallon,Y is disposable income,and P_cars is a price index for cars.Based on this information,which is NOT correct?

• A)Gasoline is inelastic.
• B)Gasoline is a normal good.
• C)Cars and gasoline appear to be mild complements.
• D)The coefficient on the price of cars (P_cars)is insignificant.
• E)All of the coefficients are insignificant.

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Definitions:

Biological Forces

Natural and inherent influences on an organism's development and behavior.

Psychological Forces

Internal or external factors that influence the mental states and behavior of an individual, such as motivations, perceptions, emotions, and personality traits.

Social-Cultural Forces

Influences that shape individuals and societies through cultural norms, values, traditions, and social structures.

Predictability And Unpredictability

Concerns the extent to which future events are perceived as being certain or uncertain, affecting behavior and decision-making.