TABLE 16-7 The Executive Vice-President of a Drug Manufacturing Firm Believes That

question 49

Short Answer

TABLE 16-7
The executive vice-president of a drug manufacturing firm believes that the demand for the firm's most popular drug has been evidencing an exponential trend since 1995. She uses Microsoft Excel to obtain the partial output below. The dependent variable is the log base 10 of the demand for the drug, while the independent variable is years, where 1995 is coded as 0, 1996 is coded as 1, etc.
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.996
R Square 0.992
Adjusted R Square 0.991
Standard Error 0.02831
Observations 12
Coefficients
Intercept 1.44
Coded Year 0.068
-Referring to Table 16-7, the forecast for the demand in 2012 is ________.

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Definitions:

Substitution Effect

The change in consumption resulting from a change in the price of a good, causing consumers to replace more expensive items with less expensive ones.

Labor-Supply Curve

A graphical representation that shows the relationship between the wage rate and the quantity of labor workers are willing to supply.

Price of Leisure

Refers to the opportunity cost of time spent on non-work activities, measured by the income foregone by not working.

Wage Rate

The amount of money paid to an employee for work performed, typically expressed per hour or unit of work.