Answer the question based on the regression equation standar

Answer the question based on the regression equation (standard errors in parentheses, n=150):

QD = 1000 - 50PA + 10PB + .05I, (20) (7) (.04)

Where QD = quantity demanded of good A, PA = price of good A, PB = price of a competing good B, and I = per capita income. Using the rule of 2, which of the following variables can be deemed statistically significant?

1. PA

2. PB

3. I

4. PC

Please explain the answer.

Solution

Answer is A

PA variable can be deemed statistically significant Since Standard error is 20 is high.