An Economist Examines the Relationship Between the Number of Patent

question 99

Essay

An economist examines the relationship between the number of patent applications filed and expenditures in research and development (Ramp;D)for the 50 states and the District of Columbia.She believes that if a state spends more on research and development,then more patents will be filed.She estimates the following model: ,where Patents is the number of patent applications filed and R&D is the state's expenditures on research and development (in $1,000,000s).The regression results are shown in the accompanying table. a.Predict the number of patents filed for a state that spends $5,000,000 on R&D.
b.Interpret the coefficient attached to R&D.
c.Calculate the standard error of the estimate.
d.Interpret the coefficient of determination.

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Definitions:

Income

The income earned, particularly on a consistent basis, from employment or investment returns.

Stock Concept

An economic term describing quantities measurable at a point in time, such as wealth or capital.

Flow Concept

A term used in economics and finance to describe quantities measured over a period of time, such as income or expenses.

Wealth

An abundance of valuable financial assets or physical possessions which can be transformed into forms that can be used for transactions.