For the Model Y = β₀ + β₁x + β₂xd

question 58

Multiple Choice

For the model y = β₀ + β₁x + β₂xd + ε,what are the hypotheses for testing the individual significance of the interaction variable xd?

• A)H₀: xd = 0,H_A: xd ≠ 0
• B)H₀: b₂ = 0,H_A: b₂ ≠ 0
• C)H₀: β₂ = 0,H_A: β₂ ≠ 0
• D)H₀: β₂ ≠ 0,H_A: β₂ = 0

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Definitions:

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor of production.

Market Wage Rate

The prevailing rate of compensation offered for labor in a specific market or industry, determined by supply and demand.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or input, used in decision-making about resource allocation.

Price-Taker Market

A market scenario in which sellers accept the market price as given because they have no influence over it, often due to high competition and standardized products.