A Sociologist Wishes to Study the Relationship Between Happiness and Age

question 118

Multiple Choice

A sociologist wishes to study the relationship between happiness and age. He interviews 24 individuals and collects data on age and happiness, measured on a scale from 0 to 100. He estimates the following model: Happiness = β₀ + β₁Age + ε. The following table summarizes a portion of the regression results. At the 1% significance level, which of the following is the correct confidence interval of the regression coefficient β₁?

• A) [0.0390, 0.0530]
• B) [0.0190, 0.5300]
• C) [0.0190, 0,0530]
• D) [0.0390, 0.5300]

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Definitions:

Sensitivity Analysis

A technique used to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.

Fixed Costs

Expenses that do not change with the amount of goods or services produced, such as rent, salaries, or insurance.

Variable Cost

Costs that change in proportion to the goods or services that a business produces.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment by summing the present values of all cash inflows and outflows associated with the investment.