The Following Data Are Available for a Simple Linear Regression

question 61

Multiple Choice

The following data are available for a simple linear regression analysis attempting to link hours of training (x) to hourly output (y) . In applying the least squares criterion, the slope (b) and the intercept (a) for the best-fitting line are b = 2.4 and a = 3.6.Set up a hypothesis test to determine whether you can reject the hypothesis that the population slope, β, is 0 at the 5% significance level.Compute the value of the appropriate sample test statistic, t_stat, and use it to reach the proper conclusion.

• A)Since t_stat is outside the critical values of ±3.213, we can reject the β=0 null hypothesis.
• B)Since t_stat is between the critical values of ±3.213, we can't reject the β=0 null hypothesis.
• C)Since t_stat is outside the critical values of ±4.403, we can reject the β=0 null hypothesis.
• D)Since t_stat is between the critical values of ±4.403, we can't reject the β=0 null hypothesis.

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Definitions:

Kinked Demand Curve

A theory in economics that suggests that prices in a monopolistic competition scenario may remain stable because competitors will match price decreases but not price increases.

Price

The amount of money expected, required, or given in exchange for something.

Kinked Demand

A demand curve that has a distinct bend or "kink," often used to describe oligopolistic markets where firms face different elasticities for price increases versus price decreases.

Oligopolistic Competition

A market structure in which a few firms dominate. Each firm is aware of the actions of others and may engage in strategic decision making.