Assume You Ran a Multiple Regression to Gain a Better

question 79

Multiple Choice

Assume you ran a multiple regression to gain a better understanding of the relationship between lumber sales,housing starts,and commercial construction.The regression uses lumber sales (in $100,000s) as the response variable with housing starts (in 1000s) (in 1,000s) and commercial construction (in 1000s) (in 1,000s) as the explanatory variables.The estimated model is Lumber Sales = β₀ + β₁ Housing Starts + β₂Commercial Constructions + ε.The following ANOVA table summarizes a portion of the regression results. If Housing Starts were 17,000 and Commercial Construction was 3,200,the best estimate of Lumber Sales would be ______________.

• A) $16,920,000
• B) $16,925,370
• C) $22,014,000
• D) $22,290,000

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Definitions:

Industry

A sector of the economy that involves the production and manufacturing of goods or the provision of services.

Long Run

A period during which all factors of production and costs are variable, in contrast with the short run where some costs are fixed.

Short Run

A period in economics during which at least one input, such as plant and equipment, is fixed, focusing on immediate effects of economic decisions.

Marginal Revenue

The additional income generated from the sale of one more unit of a product or service.