Exhibit 16

question 11

Multiple Choice

Exhibit 16.5.The following data shows the demand for an airline ticket dependent on the price of this ticket. For the assumed cubic and log-log regression models,Demand = β₀ + β₁Price + β₂Price² + β₃Price³ + ε and ln(Demand) = β₀ + β₁ln(Price) + ε,the following regression results are available: Refer to Exhibit 16.5.What does the slope of the obtained regression equation signify?

• A)For every 1% increase in the price,the predicted demand declines by approximately 3.2577%.
• B)For every 1% increase in the demand,the expected price increases by approximately 3.2577%.
• C)For every 1% increase in the demand,the expected price decreases by approximately 3.2577%.
• D)For every 1% increase in the price,the predicted demand increases by approximately 3.2577%.

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Definitions:

Economic Hardship

Economic hardship involves financial stress or difficulties, often leading to poverty, lack of basic needs, or a significant decrease in quality of life.

Federal Poverty Level

A measure of income issued every year by the Department of Health and Human Services to determine eligibility for certain programs and benefits.

Nonparental Care

Childcare that is provided by individuals who are not the child's parents, including daycare centers, nannies, and relatives other than parents.

Employed Mothers

Employed mothers refers to women who participate in the workforce while also fulfilling the role of a mother, balancing professional and familial responsibilities.