Exhibit 15-4

question 42

Multiple Choice

Exhibit 15-4.A researcher analyzes the factors that may influence amusement park attendance and estimates the following model: , where Attendance is the daily attendance (in 1000s) ,Price is the gate price (in $) ,and Rides is the number of rides at the amusement park.The researcher would like to construct interval estimates for Attendance when Price and Rides equal $85 and 30,respectively.The researcher estimates a modified model where Attendance is the response variable and the explanatory variables are now defined as and .A portion of the regression results is shown in the accompanying table. Refer to Exhibit 15-4.According to the modified model,what is a 95% prediction interval for Attendance when Price and Rides equal $85 and 30,respectively? (Note that . )

• A)[12,740,56,080]
• B)[16,330,53,450]
• C)[26,080,42,740]
• D)[28,900,41,500]

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Definitions:

Fixed Inputs

Inputs in the production process that cannot be easily increased or decreased in the short run, such as land or machinery.

Variable Inputs

Resources used in production that can vary in quantity in the short run, such as labor and raw materials.

Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain constant.

Fixed Inputs

Resources used in production that cannot be easily increased or decreased in the short term, such as buildings or machinery.