44. The slope coefficient estimate b from a regression of profits on sales of a number of firms in the coal industry is 0.075. How should you interpret this coefficient? a) Average profit in the coal industry is 7.5%. b) If a firm in the coal industry were to increase its sales by $1, its profits would rise on average by $0.075. c) If a firm has 1 more dollar in sales than another firm in the coal industry, it will have 7.5 more cents in profit on average. d) Average profit in the coal industry is .75%. e) If a firm in the coal industry were to increase its sales by $1, its profits would rise on average by $0.0075. 45. A regression’s equation is given as: Q = 5 – 3P, which means that: a) a 3% increase in Price will decrease Quantity by 1% b) a 1% increase in Price will increase Quantity by 3% c) a 1% increase in Price will decrease Quantity by 3% d) a 3% increase in Quantity will decrease Price by 1%
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
44. The slope coefficient estimate b from a regression of profits on sales of a number of firms in the coal industry is 0.075. How should you interpret this coefficient?
a) Average profit in the coal industry is 7.5%.
b) If a firm in the coal industry were to increase its sales by $1, its profits would rise on average by $0.075.
c) If a firm has 1 more dollar in sales than another firm in the coal industry, it will have 7.5 more cents in profit on average.
d) Average profit in the coal industry is .75%.
e) If a firm in the coal industry were to increase its sales by $1, its profits would rise on average by $0.0075.
45. A regression’s equation is given as: Q = 5 – 3P, which means that:
a) a 3% increase in Price will decrease Quantity by 1%
b) a 1% increase in Price will increase Quantity by 3%
c) a 1% increase in Price will decrease Quantity by 3%
d) a 3% increase in Quantity will decrease Price by 1%
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