Answer the following statements true (T) or false (F)
1) Omitting relevant variables from the regression analysis can bias the regression results.
2) If a nonlinear regression equation provides a better fit to the actual data, but a straight-line regression is estimated, the estimated straight-line regression will have a greater R2 than the R2 from the nonlinear regression.
3) If a scatter plot of the data points for the price and quantity demanded appear to have a convex (bowed inward) shape, estimating a log-linear demand curve will likely yield a R2 that is greater than the R2 from a straight-line demand curve.
4) Using Excel, Best Paints estimates the log-linear weekly demand function for their gallon sized paints to be ln Qd = 16.23 - (1.85 × ln P); at a price of $35, the predicted quantity Qd ^ is 15,562.29.
5) A nonlinear demand curves have positive slope.
1) TRUE
2) FALSE
3) TRUE
4) FALSE
5) FALSE
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