TABLE 16-12 A Local Store Developed a Multiplicative Time-Series Model to Forecast

question 137

Multiple Choice

TABLE 16-12
A local store developed a multiplicative time-series model to forecast its revenues in future quarters,using quarterly data on its revenues during the 5-year period from 2008 to 2012.The following is the resulting regression equation:
log₁₀
= 6.102 + 0.012 X - 0.129 Q₁ - 0.054 Q₂ + 0.098 Q₃
where is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 2008
Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise
Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise
-Referring to Table 16-12,in testing the significance of the coefficient for Q₁ in the regression equation (-0.129) which has a p-value of 0.492.Which of the following is the best interpretation of this result?

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Definitions:

Profit-maximizing

The process by which a firm determines the price and output level that returns the greatest profit.

Selling Price

The amount of money for which a product or service is sold to customers.

Wage Rate

The standard amount of compensation given to employees for their labor, usually expressed per hour or per unit of work done.

Marginal Wage Cost

The additional cost incurred by hiring one more unit of labor, reflecting the change in total wage expenses.