Consider the Sample Regression Function $\hat { Y }$ _i = $\hat{\beta} _ { 0 }$

question 25

Essay

Consider the sample regression function $\hat { Y }$ _i = $\hat{\beta} _ { 0 }$ + $\hat{\beta} _ { 1 }$ X_i. The table below lists estimates for the slope ( $\hat{\beta }_ { 1 }$ )and the variance of the slope estimator ( $\hat { \sigma } ^ { 2 } { \hat { \beta } 1 }$ ). In each case calculate the p-value for the null hypothesis of ?₁ = 0 and a two-tailed alternative hypothesis. Indicate in which case you would reject the null hypothesis at the 5% significance level. $\begin{array}{|c|c|c|c|c|} \hline \hat{\beta } _1& -1.76&0.0025&2.85&-0.00014\\\hline \hat{\sigma}^2\hat{\beta}_1&0.37&0.000003&117.5&0.0000013\\\hline\end{array}$

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Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can afford given their income and the prices of the goods.

Satisfaction

The state of feeling pleased or content with something.

Indifference Curve

A graphical representation showing combinations of goods or services that provide the same level of utility or satisfaction to a consumer.

Budget Lines

A graphical representation of all possible combinations of two goods that can be purchased with a fixed income.