SCENARIO 18-7
as a Project for His Business Statistics Class,a $\alpha$

question 6

Multiple Choice

SCENARIO 18-7
As a project for his business statistics class,a student examined the factors that determined parking meter rates throughout the campus area.Data were collected for the price per hour of parking,blocks to the quadrangle,and one of the three jurisdictions: on campus,in downtown and off campus,or outside of downtown and off campus.The population regression model hypothesized is
Y_i = $\alpha$ + $\beta$ ₁ X_1i + $\beta$ ₂ X _2i + $\beta$ ₃ X _3i + $\varepsilon$
where
Y is the meter price
X₁ is the number of blocks to the quad
X₂ is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise
X₃ is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus,and the value 0 otherwise
The following Excel results are obtained.

-Referring to Scenario 18-7,what is the correct interpretation for the estimated coefficient for X₂?

• A)Holding the effect of the other independent variables constant,the estimated mean difference in costs between parking on campus,and parking outside of downtown and off campus is -$0.24 per hour.
• B)Holding the effect of the other independent variables constant,the estimated mean difference in costs between parking in downtown and off campus,and parking on campus is -$0.24 per hour.
• C)Holding the effect of the other independent variables constant,the estimated mean difference in costs between parking in downtown and off campus,and parking outside of downtown and off campus is -$0.24 per hour.
• D)Holding the effect of the other independent variables constant,the estimated mean difference in costs between parking in downtown and off campus,and parking either outside of downtown and off campus or on campus is -$0.24 per hour.

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Definitions:

Scale of Production

The level at which a production process is operating, ranging from small to large scale based on output volume and capacity.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.

Average Total Cost

The total cost of production divided by the total quantity produced, indicating the per unit cost of production.

Scale of Production

The size or extent of the production operations of a firm, determining its capacity to produce goods or services.