MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Chapter 1.A, Problem 1TY
To determine
To draw:
A 2 variable diagram and measure the slope of the line along with the meaning of the numbers.
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Draw the graph of U = q1 + aq2 and U= q1^2 + q2^2. Interpret the parameter and shape of the curve.
1. Solve the following problem by using Excel for graph sketching.
A soda vendor at Louisiana State University football games observes that more sodas
are sold the warmer the temperature at game time is. Based on 32 home games
covering five years, the vendor estimates the relationship between soda sales and
temperature to be y = -240 + 8x, where y = the number of sodas she sells and .x =
temperature in degrees Fahrenheit,
(a) Interpret the estimated slope and intercept. Do the estimates make sense? Why,
or why not?
(b) On a day when the temperature at game time is forecast to be 80°F, predict how
many sodas the vendor will sell.
(c) Below what temperature are the predicted sales zero?
(d) Sketch a graph of the estimated regression line.
Construct a table from the data shown on the graph below. Which is the dependent variable and which the independent variable? Summarize the data in equation form.
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