A Linear Regression of Age (X) on Blood Lead Levels

question 18

Multiple Choice

A linear regression of age (x) on blood lead levels (y) for men who have worked in factories that manufacture car batteries is performed. The residual plots suggest there is still a pattern remaining, and you decide to add a quadratic term (age²) for age into the model. Which of the following models is now most appropriate?

• A) Blood lead levels = a + b21 (age) + e, e ~iid N(0, s2)
• B) Blood lead levels = a + b1 (age) + e2, e ~ iid N(0, s2)
• C) Blood lead levels = a + b1 (age) + b2 (age2) + e, e ~iid N(0, s2)
• D) Blood lead levels = a + b1 (age2) + e, e ~iid N(0, s2)

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Definitions:

Net Welfare Loss

The loss in social welfare, usually due to inefficiencies in the market system or government intervention policies that lead to misallocation of resources.

Specific Tariff

A fixed fee imposed by a government on imported or exported goods, based on physical units like weight or quantity.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually do pay.

World Price

The price of a good that prevails in the global market for internationally traded goods.