TABLE 14-9 You Decide to Predict Gasoline Prices in Different Cities and Different

question 236

Multiple Choice

TABLE 14-9
You decide to predict gasoline prices in different cities and towns in the United States for your term project. Your dependent variable is price of gasoline per gallon and your explanatory variables are per capita income, the number of firms that manufacture automobile parts in and around the city, the number of new business starts in the last year, population density of the city, percentage of local taxes on gasoline, and the number of people using public transportation. You collected data of 32 cities and obtained a regression sum of squares SSR= 122.8821. Your computed value of standard error of the estimate is 1.9549.
-Referring to Table 14-9, if variables that measure the number of new business starts in the last year and population density of the city were removed from the multiple regression model, which of the following would be true?

• A) The coefficient of multiple determination will definitely increase.
• B) The coefficient of multiple determination will not increase.
• C) The adjusted r² cannot increase.
• D) The adjusted r² will definitely increase.

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Definitions:

Consumption

The use of goods and services by households or individuals, typically measured to understand economic activity and consumer behavior.

Utility Function

A representation of a consumer's preferences, modelling satisfaction obtained from consuming goods and services.

Interest Rate

The percentage of a sum of money charged for its use, often expressed annually.

Consumption

The use of goods and services by households, leading to a decrease in their quantity or quality.