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The tobacco data set contains data from 1999-2013 available from the St. Louis Federal Reserve Bank. The data concern US expenditures on tobacco and tobacco related products and a price index for the same. The expenditures are in billions of 2009 dollars. What is the average US expenditure on tobacco for those years in billions of dollars? Answer to 1 decimal place. Hint, your number should be less than 121 and greater than 90.

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Question

Sets” tab of Bb.  If you downloaded the data select “true”. True

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1 points   QUESTION 2

  1. The tobacco data set contains data from 1999-2013 available from the St. Louis Federal Reserve Bank.  The data concern US expenditures on tobacco and tobacco related products and a price index for the same.  The expenditures are in billions of 2009 dollars.  What is the average US expenditure on tobacco for those years in billions of dollars? Answer to 1 decimal place.  Hint, your number should be less than 121 and greater than 90.

1 points   QUESTION 3

  1. Use the tobacco data provided to run a regression where expenditure on tobacco is the dependent variable and the price index is the independent variable.  What is R square?  Answer to three decimal places.

1 points   QUESTION 4

  1. Use the tobacco data provided to run a regression where expenditure on tobacco is the dependent variable and the price index is the independent variable.  You already found R square for this regresion.  What is the estimated variance of the error term?  Answer to three decimal places.

2 points   QUESTION 5

  1. Use the tobacco data provided to run a regression where expenditure on tobacco is the dependent variable and the price index is the independent variable.  You already found R square for this regresion.  What is the estimated coefficient on the price index?  Answer to three decimal places.

2 points   QUESTION 6

  1. Use the tobacco data provided to run a regression where expenditure on tobacco is the dependent variable and the price index is the independent variable.  You already found R square and other results for this regresion.  What is the standard error for the estimated slope of the regression line?  Answer to fourdecimal places.

2 points   QUESTION 7

  1. Use the tobacco data provided to run a regression where expenditure on tobacco is the dependent variable and the price index is the independent variable.  You already found verious regression results.  What is the test statistic for a test that the slope of the regression line is 0?  Answer to two decimal places.  

2 points   QUESTION 8

  1. In the tobacco consumption versus price regression that you just ran you fail to reject the hypothesis that the slope is 0 (i.e. that the price has no impact on the amount sold and consumed). True False

2 points   QUESTION 9

  1. In the tobacco consumption versus price regression that you just ran you reject the hypothesis that the intercept is 0. True False

2 points   QUESTION 10

  1. Use the tobacco data provided to run a regression where expenditure on tobacco is the dependent variable and the price index is the independent variable.  You already found R square and the variance of the error term for this regresion.  What is the predicted total expenditure (in billions) on tobacco when the price index is 600?  Answer to one decimal place.  Hint your answer should be between 80 and 130.

2 points   QUESTION 11

  1. HINT:  WE MIGHT NOT GET TO THIS IN CLASS BUT THE ANSWER IS 109.8.  Use the tobacco data provided to run a regression where expenditure on tobacco is the dependent variable and the price index is the independent variable.  Construct a 90% prediction interval for total expenditure (in billions) on tobacco when the price index is 600.  Note that you already found the predicted value when the price index is 600.  Report the upper limit (bigger number) on the prediction interval.  Answer to one decimal place.  

2 points   QUESTION 12

  1. HINT: WE MIGHT NOT GET TO THIS IN CLASS BUT THE ANSWER IS 102.8.  Use the tobacco data provided to run a regression where expenditure on tobacco is the dependent variable and the price index is the independent variable.  Construct a 90% prediction interval for total expenditure (in billions) on tobacco when the price index is 600.  Note that you already found the predicted value when the price index is 600.  Report the lower limit (smaller number) on the prediction interval.  Answer to one decimal place.  

2 points   QUESTION 13

  1. Based on your regression in the previous question using the tobacco data, what happens to total expenditure on tobacco in the US as the price of tobacco increases?The total expenditure stays constant because as the price increases the amount people buy stays the same.The total expenditure decreases.  As the prices rises people decrease the amount the buy so much that total expenditure goes down.Total expenditure increases.  As the price rises people buy less but not enough less to make up for the higher price and so as a country we end up spending even more on tobacco.None of the other answers are correct.

2 points   QUESTION 14

  1. Use the tobacco data provided to run a regression where ln(Q) is the dependent variable and ln(P) is the independent variable.  Those are variables I created which are the natural log of quantity and the natural log of price for tobacco.  When we take natural logs like this we can interpret the coefficient on ln(P) as an elasticity.  What is R square?  Answer to three decimal places.

2 points   QUESTION 15

  1. Use the tobacco data provided to run a regression where ln(Q) is the dependent variable and ln(P) is the independent variable.  Those are variables I created which are the natural log of quantity and the natural log of price for tobacco.  When we take natural logs like this we can interpret the coefficient on ln(P) as an elasticity.  What is estimated standard deviation of the error term?  Answer to three decimal places.

2 points   QUESTION 16

  1. Use the tobacco data provided to run a regression where ln(Q) is the dependent variable and ln(P) is the independent variable.  Those are variables I created which are the natural log of quantity and the natural log of price for tobacco.  When we take natural logs like this we can interpret the coefficient on ln(P) as an elasticity.  What is estimated coefficient on ln(P)?  Answer to two decimal places.

2 points   QUESTION 17

  1. Use the tobacco data provided to run a regression where ln(Q) is the dependent variable and ln(P) is the independent variable.  Those are variables I created which are the natural log of quantity and the natural log of price for tobacco.  When we take natural logs like this we can interpret the coefficient on ln(P) as an elasticity.  The test statistic for the hypothesis that slope (or beta one) is 0 is provided by excel if you ran the regression using its standard package.  What is the test statistic for the null hypothesis that the slope is -1?  Answer to two decimal places.  Be careful and note that subtracting a negative is like adding a positive.

2 points   QUESTION 18

  1. Use the tobacco data provided to run a regression where ln(Q) is the dependent variable and ln(P) is the independent variable.  Those are variables I created which are the natural log of quantity and the natural log of price for tobacco.  When we take natural logs like this we can interpret the coefficient on ln(P) as an elasticity.  What is the p-value for the F test that the slope is 0?  Answer to three decimal places.
 
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