The Interpretation of the Slope Coefficient in the Model Ln(Yi)=

question 60

Multiple Choice

The interpretation of the slope coefficient in the model ln(Yi) = β0 + β1 ln(Xi) + ui is as follows:

• A)a 1% change in X is associated with a β1 % change in Y.
• B)a change in X by one unit is associated with a β1 change in Y.
• C)a change in X by one unit is associated with a 100 β1 % change in Y.
• D)a 1% change in X is associated with a change in Y of 0.01 β1.

---

Definitions:

Opportunity Cost

Opting for one opportunity causes the relinquishment of possible gains from not selected alternatives.

Production Possibilities Curve

The Production Possibilities Curve (PPC) is a graphical representation that shows the maximum quantity of two goods or services that can be produced with limited resources.

Future Location

Refers to a place where something is expected or planned to be situated at a later time.

Economic Generalizations

General statements that summarize common relationships or patterns within an economy, often derived from empirical observations and economic theory.