Discuss which economic theories or relationships you have studied up until now (

Question

Discuss which economic theories or relationships you have studied up until now (not just in this class – in all your economics classes) that could be estimated using the multiple linear regression model. Explain your rationale.

Select one or more of the theories or relationships you discussed above and determine what data you would need to estimate such a relationship. Provide examples to support your response. Discuss how the problem you research in the e-Activity was solved using estimation and hypothesis testing. Determine if you would have approached the problem in the same way, and if not, what you might have done differently.

Explanation / Answer

One economic theory which can be discussed here is law of demand. It is a theory stating the negative relationship between price of a good and its quantity demanded.

Another one is the law of supply. It is a theory stating the positive relationship between price of a good and its quantity supplied.

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Data required to test the relationship with the help of a regression equation is: cross sectional data on price of a good, quantity demanded of the good.

E.g. Price and quantity demanded of bananas from 1990-2015.

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No comment can be provided on e-Activity project as information is incomplete in this regard and makes reference to textbook. kindly post full question here to get the answer.

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