When Conducting an F-Test, the Unrestricted Model Is the One

question 3

True/False

When conducting an F-test, the unrestricted model is the one that includes all of the independent variables that are in the full model, while the restricted model include only the variables that conform with our null hypothesis.

---

Definitions:

Average Total Costs

The total cost of production divided by the quantity produced, representing the per-unit cost of producing a good or service.

Economies Of Scale

Operational scale increases lead to cost efficiencies for businesses, prominently reflecting in reduced production costs per unit as the amount of output grows.

Diseconomies Of Scale

The situation when a firm’s average total cost of producing a product increases in the long run as the firm increases the size of its plant (and, hence, its output).

Technologically Progressive

Characterized by innovative application of knowledge and technology to improve products, services, or processes.