{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# FPA - Econ 444 Elementary Econometrics Fall 2007 ANSWERS TO...

This preview shows pages 1–2. Sign up to view the full content.

Econ 444 Elementary Econometrics Fall 2007 ANSWERS TO SAMPLE PROBLEMS for CHAPTERS 6,7,8, AND 10 1. (a) Because economic theory suggests that the demand for food falls when the price of food rises, we expect β 1 < 0. Hence the alternative hypothesis H A : β 1 < 0 is appropriate. (b) At the 5% level, the critical value is 1.753 for d.f.= 18 - 3 = 15. (b-1) t = - 1 . 5 / 0 . 5 = - 3. Hence we reject the null hypothesis. (b-2) t = - 1 . 5 / 0 . 9 = - 1 . 667. Hence we do not reject it. (b-3) t = - 1 . 5 / 1 . 2 = - 1 . 25. Hence we do not reject it. (b-4) The point estimate of β 1 is positive, hence we do not reject it. (b-5) The point estimate of β 1 is positive, hence we do not reject it. (b-6) The point estimate of β 1 is positive, hence we do not reject it. (c) We have elastic demand when β 1 < - 1. Hence H A : β 1 < - 1 is appropriate. (d) At the 5% level, the critical value is 1.753 for d.f. = 18 - 3 = 15. (d-1) t = [ - 2 . 1 - ( - 1)] / 0 . 5 = - 2 . 2. Hence we reject the null hypothesis. (d-2) t = [ - 2 . 1 - ( - 1)] / 0 . 9 = - 1 . 345. Hence we do not reject it. (d-3) t = [ - 2 . 1 - ( - 1)] / 1 . 2 = - 0 . 917. Hence we do not reject it. (d-4) t = [ - 1 . 4 - ( - 1)] / 0 . 15 = - 2 . 667. Hence we reject it.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 3

FPA - Econ 444 Elementary Econometrics Fall 2007 ANSWERS TO...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online