TABLE 17-2 One of the Most Common Questions of Prospective House Buyers

question 271

Multiple Choice

TABLE 17-2
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) .To provide its customers with information on that matter,a large real estate firm used the following 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X₁) ,the amount of insulation in inches (X₂) ,the number of windows in the house (X₃) ,and the age of the furnace in years (X₄) .Given below are the EXCEL outputs of two regression models.
-Referring to Table 17-2,what is your decision and conclusion for the test H₀ : β₂ = 0 vs.H₁ : β₂ < 0 at the α = 0.01 level of significance using Model 1?

• A)Do not reject H₀ and conclude that the amount of insulation has a linear effect on heating cots.
• B)Reject H₀ and conclude that the amount of insulation does not have a linear effect on heating costs.
• C)Reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs.
• D)Do not reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs.

Understand how taxes affect both buyers and sellers in the market.

Analyze the impact of taxes on market equilibrium, including changes in surplus and tax revenue.

Identify how taxes shift supply and demand curves.

Calculate the total surplus before and after a tax is imposed.

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Definitions:

Product Price

The total money demanded to buy a given product or service.

Marginal Product

The extra production achieved through the use of an additional unit of a specific input, while keeping all other inputs unchanged.

Wage Rate

The amount of money that an employee is paid per hour, week, or another unit of time for their labor.

Derived Demand

The demand for a good or service that arises from the demand for another good or service.