3. Consider the following model of car sales: In (qnc) = ₁ + ß₂ ln (price) + Bing In (income)+u where qnc is the number of cars sold (in thousands), price is the average price of new cars (in $1,000), and income is the per capita income (in $1,000). Give the economic interpretation of the parameters Bo, Bp and Binc. What sign do you expect these parameters to have?
3. Consider the following model of car sales: In (qnc) = ₁ + ß₂ ln (price) + Bing In (income)+u where qnc is the number of cars sold (in thousands), price is the average price of new cars (in $1,000), and income is the per capita income (in $1,000). Give the economic interpretation of the parameters Bo, Bp and Binc. What sign do you expect these parameters to have?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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