If Excel estimated the 95 percent confidence interval for a slope coefficient for the price to run from - 25.50 to - 22.30, which of the following is true?
A)You are 95 percent confident that in response to dollar increase in price, consumers will decrease the quantity demanded by an amount that lies between 22.30 and 25.50.
B)You are 95 percent confident that in response to dollar increase in price, consumers will decrease the quantity demanded by an amount greater than 25.50.
C)You are 95 percent confident that in response to dollar increase in price, consumers will decrease the quantity demanded by an amount greater than 22..30.
D)You are 95 percent confident that in response to dollar increase in price, consumers will increase the quantity demanded by an amount that lies between 22.30 and 25.50.

Question

If Excel estimated the 95 percent confidence interval for a slope coefficient for the price  to run from - 25.50 to - 22.30, which of the following is true?
A)You are 95 percent confident that in response to dollar increase in price, consumers will decrease the quantity demanded by an amount that lies between 22.30 and 25.50. 
B)You are 95 percent confident that in response to dollar increase in price, consumers will decrease the quantity demanded by an amount greater than 25.50. 
C)You are 95 percent confident that in response to dollar increase in price, consumers will decrease the quantity demanded by an amount greater than 22..30. 
D)You are 95 percent confident that in response to dollar increase in price, consumers will increase the quantity demanded by an amount that lies between 22.30 and 25.50.

Quizplus · Accepted Answer

The confidence interval for the slope coefficient (price) is from -25.50 to -22.30. Since it is a negative slope coefficient for price, we can interpret this as: for every one dollar increase in price, the quantity demanded will decrease between 22.30 and 25.50. Therefore, we are 95 percent confident that consumers will decrease the quantity demanded by an amount that lies between 22.30 and 25.50 in response to a one dollar increase in price.

If Excel Estimated the 95 Percent Confidence Interval for a Slope