SCENARIO 18-4 You Decide to Predict Gasoline Prices in Different Cities and Cities

question 164

Multiple Choice

SCENARIO 18-4
You decide to predict gasoline prices in different cities and towns in the United States for your term project.Your dependent variable is price of gasoline per gallon and your explanatory variables are per capita income,the number of firms that manufacture automobile parts in and around the city,the number of new business starts in the last year,population density of the city,percentage of local taxes on gasoline,and the number of people using public transportation.You collected data of 32 cities and obtained a regression sum of squares SSR= 122.8821.Your computed value of standard error of the estimate is 1.9549.
-Referring to Scenario 18-4,what is the value of the coefficient of multiple determination?

• A)0.2225
• B)0.4576
• C)0.5626
• D)0.6472

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Definitions:

Returns to Scale

The variation in production output resulting from a proportional alteration of all input factors in the manufacturing process.

Constant-Cost Industry

An industry in which the input prices and production costs remain constant as the industry output changes.

Long-Run Equilibrium

A state in which all firms in an industry are producing at their minimum long-run average cost and are earning normal profits.

Units of Output

The measurable amount of goods or services produced by a company or industry.