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TABLE 14-6 One of the Most Common Questions of Prospective House Buyers

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TABLE 14-6
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.
Model 1
TABLE 14-6 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. Model 1 Model 2 -Referring to Table 14-6, the estimated value of the partial regression parameter β₁ in Model 1 means that A) holding the effect of the other independent variables constant, an estimated expected $1 increase in heating costs is associated with a decrease in the daily minimum outside temperature by 4.51 degrees. B) holding the effect of the other independent variables constant, a 1 degree increase in the daily minimum outside temperature results in a decrease in heating costs by $4.51. C) holding the effect of the other independent variables constant, a 1 degree increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by $4.51. D) holding the effect of the other independent variables constant, a 1% increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by 4.51%.
Model 2
TABLE 14-6 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. Model 1 Model 2 -Referring to Table 14-6, the estimated value of the partial regression parameter β₁ in Model 1 means that A) holding the effect of the other independent variables constant, an estimated expected $1 increase in heating costs is associated with a decrease in the daily minimum outside temperature by 4.51 degrees. B) holding the effect of the other independent variables constant, a 1 degree increase in the daily minimum outside temperature results in a decrease in heating costs by $4.51. C) holding the effect of the other independent variables constant, a 1 degree increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by $4.51. D) holding the effect of the other independent variables constant, a 1% increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by 4.51%.
-Referring to Table 14-6, the estimated value of the partial regression parameter β₁ in Model 1 means that

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A popular dish of Italian origin consisting of a round, flat base of dough topped with tomatoes, cheese, and various other ingredients baked at a high temperature.

Supply Curve

A graphical representation that illustrates the amount of product businesses are willing to produce and sell at different price points.

Decrease in Supply

A situation where the quantity of a good that producers are willing and able to sell at a given price level falls, often due to factors like increased production costs or natural disasters.

Supply Curve

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

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