SCENARIO 15-6 Given Below Are Results from the Regression Analysis

question 63

True/False

SCENARIO 15-6 Given below are results from the regression analysis on 40 observations where the dependent variable is the number of weeks a worker is unemployed due to a layoff (Y)and the independent variables are the age of the worker ( ), the number of years of education received ( ), the number of years at the previous job ( ), a dummy variable for marital status ( 1 = married, 0 = otherwise), a dummy variable for head of household ( 1 = yes, 0 = no)and a dummy variable for management position ( 1 = yes, 0 = no). The coefficient of multiple determination ( )for the regression model using each of the 6 variables as the dependent variable and all other X variables as independent variables are, respectively, 0.2628, 0.1240, 0.2404, 0.3510, 0.3342 and 0.0993. The partial results from best-subset regression are given below:
-Referring to Scenario 15-6, the variable x₁ should be dropped to remove collinearity?

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Definitions:

Natural Monopoly

A market condition where due to high fixed or startup costs, a single firm can supply a product or service to an entire market more efficiently than multiple firms could.

Electricity

A form of energy resulting from the existence of charged particles such as electrons or protons, either statically as an accumulation of charge or dynamically as a current.

Producer Surplus

The difference between the amount producers are willing to sell a good for and the actual amount they receive, usually represented graphically as the area above the supply curve and below the market price.

Consumer Surplus

The differential between the amount envisioned by consumers to pay for a good or service and the actual amount paid.