● 1. The table below lists 4 observations of price (Px) and quantity (Qx) for a product X, their respective averages or means, and the estimated Q values (Q*) based on a demand function (Q* = 208-0.1Px). Entry Px Qx Q* 1 $220 176 186 2 $520 147 156 a. Compute the TSS value for the observation above: 3 $480 153 160 b. Compute the SSE value for the observations above: 4 $580 144 150 5 $340 175 174 c. Compute the R² value (round to two decimals) based on your answers above and interpret its meaning: Mean $428 159
● 1. The table below lists 4 observations of price (Px) and quantity (Qx) for a product X, their respective averages or means, and the estimated Q values (Q*) based on a demand function (Q* = 208-0.1Px). Entry Px Qx Q* 1 $220 176 186 2 $520 147 156 a. Compute the TSS value for the observation above: 3 $480 153 160 b. Compute the SSE value for the observations above: 4 $580 144 150 5 $340 175 174 c. Compute the R² value (round to two decimals) based on your answers above and interpret its meaning: Mean $428 159
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:●
1. The table below lists 4 observations of price (Px) and quantity (Qx) for a product X,
their respective averages or means, and the estimated Q values (Q*) based on a demand
function (Q* = 208-0.1Px).
Entry
Px
Qx
Q*
1
$220
176
186
2
$520
147
156
a. Compute the TSS value for the observation above:
3
$480
153
160
b. Compute the SSE value for the observations above:
4
$580
144
150
5
$340
175
174
c. Compute the R² value (round to two decimals) based on your answers above and interpret
its meaning:
Mean
$428
159
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