# Economics and Management

The following questions refer to this regression equation. (Standard errors in parentheses.)

QD = 15,000 - 10 P + 1500 A + 4 PX + 2 I, (5,234) (2.29) (525) (1.75) (1.5)

R2 = 0.65

N = 120

F = 35.25

Standard error of Y estimate = 565

Q = Quantity demanded

P = Price = 7,000

A = Advertising expense, in thousands = 54

PX = price of competitor's product = 8,000

I = average monthly income =4,000

2) How is the R2 value calculated, and what information does this give you?

3) When would you use a one-tailed rather than a two-tailed t-test when checking significance levels?

4) What is multicollinearity? In general, how would you know if you had a problem with multicollinearity, and how could you correct it?

7) Explain the difference between Cross-Section and Time-Series Regression Analysis.