Bоnus Questiоn (5 pоints) An economist wаnts to аnаlyze the impact of self-driving taxi services on the demand for Uber and Lyft. To do so, the economist applies (1) __________ (a. linear regression, b. discrete choice model, c. supervised learning) to measure the marginal effect of self-driving taxi demand on Uber and Lyft. Here, Uber and Lyft's demand is treated as a continuous dependent variable. Next, the economist seeks to estimate potential consumers' willingness to pay for self-driving taxi services with personalized music options (e.g., allowing consumers to listen to their preferred songs while riding an AI-powered taxi). To measure willingness to pay, the economist surveys respondents, asking whether they would be willing to pay $2 per mile for a self-driving taxi. Each respondent can answer "Yes (=1)" or "No (=0)", making this a discrete dependent variable in the willingness-to-pay estimation. Based on the survey results, the economist applies (2) ___________ (a. linear regression, b. logistic regression, c. supervised learning) to estimate consumers' willingness to pay. This approach, known as the contingent valuation method (CVM), is commonly used to estimate willingness to pay for non-market goods (e.g., clean air) and newly introduced products. The methods used in (1) and (2) rely on (3) _________________ (a. in-sample prediction for interpretation, b. out-of-sample prediction for prediction). Now, the economist aims to forecast the demand for self-driving taxis, Uber, and Lyft in 2026. To predict continuous demand variables for 2026, the economist can use (4) ___________________ (a. linear regression, b. logistic regression, c. supervised learning) for (5) _______________________ (a. in-sample prediction for interpretation, b. out-of-sample prediction for prediction). In sum, (1) is for market and firm-level analysis. (2) is for pricing strategies and consumer welfare analysis. (3) is for forecasting market trends. By applying these methods, the economist can gain insights into consumer behavior, firm strategies, and market dynamics, leading to more informed, data-driven decisions regarding price, product, placement, and promotion (i.e., the 4Ps in marketing).