Exhibit 15-2 A Regression Model Between Sales (Y in $1,000), Unit Price

question 10

Multiple Choice

Exhibit 15-2
A regression model between sales (Y in $1,000) , unit price (X₁ in dollars) and television advertisement (X₂ in dollars) resulted in the following function: For this model SSR = 3500, SSE = 1500, and the sample size is 18.
-Refer to Exhibit 15-2. The coefficient of the unit price indicates that if the unit price is

• A)increased by $1 (holding advertising constant), sales are expected to increase by $3
• B)decreased by $1 (holding advertising constant), sales are expected to decrease by $3
• C)increased by $1 (holding advertising constant), sales are expected to increase by $4,000
• D)increased by $1 (holding advertising constant), sales are expected to decrease by $3,000

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Definitions:

Production Function

A mathematical model that describes the relationship between inputs used in production and the resultant output of goods or services.

Labor

Workforce or employment involved in the creation of goods and services within an economy.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase at different prices.

Labor Supply Curve

Represents the relationship between the quantity of labor supplied and the wage rate in a given period.