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Exhibit 9.4
The following questions are based on the problem description and spreadsheet below.
A charitable organization wants to determine what type of people donate to charities like itself. The charity felt that a person's education (in years), annual income, ($1,000) and the number of children the person had were important variables to consider. The charity developed regression models for all of the possible combinations of these three variables but does not know what to do with the results.
-Refer to Exhibit 9.4. Predict the mean donation by a person with 16 years of education, $90,000 annual income and 2 children. Use a full model based on data from the table.
Marginal Revenue Product
The extra income produced by using an additional unit of a production input, like labor or capital.
Productivity
Refers to the measure of output per unit of input.
Input Demand Curves
Graphs showing the relationship between the price of inputs and the quantity of inputs demanded by producers.
Marginal Product
The elevation in production output stemming from the addition of one unit of input.
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