# The coefficient of a linear regression equation

1.The coefficient of a linear regression equation indicates

the change in the independent variable relative to a unit change in the dependent variable.

the change in the dependent variable relative to a unit change in the independent variable.

the percentage change in the dependent variable relative to a unit change in the independent variable.

the percentage change in the independent variable relative to a unit change in the dependent variable

2.Which of the following is most likely to indicate a statistically significant regression coefficient?

t > 2

R2 > .90

t > R2

F > 4

none of the above because of insufficient information

3.Answer the following question on the basis of the regression results below (standard errors in parentheses, n = 200)

Qd = -500 - 100Pa + 50Pb + .3I + .2A

(250) (50) (30) (.1) (.8)

R2 = .12

where:

Qd = 10,500, quantity demanded of product "A"

Pa = $10, price of product "A"

Pb = $8, price of product "B"

I = $12,000, per capita income

A = $20,000, monthly advertising expenditures

Which of the variables does not pass the t-test at the .05 level of significance?

Pa

Pb

I

A

Both A and Pb

#### Solution Preview

1.The coefficient of a linear regression equation indicates

the change in the independent variable relative to a unit change in the dependent variable.

the change in the dependent variable relative to a unit change in the independent variable.

the percentage change in the dependent variable relative to a unit change in the independent variable.

the percentage change in the independent variable relative to a unit ...

#### Solution Summary

The coefficient of a linear regression equation is highlighted.