A Regression Analysis Between Sales (In $1000) and Advertising (In

question 23

Multiple Choice

A regression analysis between sales (in $1000) and advertising (in $) resulted in the following least squares line: = 80,000 + 5x. This implies that:

• A) an increase of $1 in advertising is expected, on average, to result in an increase of $5 in sales
• B) an increase of $5 in advertising is expected, on average, to result in an increase of $5,000 in sales
• C) an increase of $1 in advertising is expected, on average, to result in an increase of $80,005 in sales
• D) an increase of $1 in advertising is expected, on average, to result in an increase of $5,000 in sales
• E) all of these

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Definitions:

Cigarette Ban

A cigarette ban is a public policy that prohibits the sale, consumption, and/or advertisement of cigarettes in order to protect public health.

Market Effects

The impact of economic events or policies on the broader market, including changes in prices, demand, and supply.

Subsidy Benefit

Financial assistance provided by the government to an individual or organization, aiming to reduce costs and encourage specific economic activities.

Demand Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with high elasticity indicating a significant response.