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Fall09Midterm2A - Midterm 2 Fall 2009 Economics 203 Form A...

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Midterm 2 - Fall 2009 Economics 203 - Form A Instructor: Petry Name: Before beginning the exam, please verify that you have 22 pages with 43 questions in your exam booklet. You should also have a decision-tree and formula sheet provided to you. Please include your full name and Net-ID on your bubble sheets. Based on the name of your TA and discussion time, please code in the following for the “Section” portion on your scantron: TA Name Discussion Day and Time Section Mahdi Rastad Friday 8am 001 Mahdi Rastad Friday 9am 002 Soroush Ghazi Kalahroudi Friday 10am 003 Soroush Ghazi Kalahroudi Friday 11am 004 Luke Godwin-Jones Friday 12pm 005 Luke Godwin-Jones Friday 1pm 006 Josh Brown Friday 2pm 007 Josh Brown Friday 3pm 008 Lusha Zhu Friday 4pm 009 Lusha Zhu Friday 5pm 010 Good luck! 1. The following are three of the steps in the modelling process. Select the correct order in which they should occur (steps may be omitted between those given below). 1. Estimate the model coefficients using statistical software 2. Develop a model with a sound theoretical basis 3. Gather the data a. 1 then 3 then 2 b. 2 then 1 then 3 c. 2 then 3 then 1 d. 3 then 1 then 2 e. 3 then 2 then 1 1
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Use the following information to answer the next 4 questions (2-5): You collect data on five friends with regards to their daily income (the dependent variable) and years of education (the independent variable). The data are presented below: Friends Income Education Steve 200 16 Amy 160 12 Susan 190 13 Dan 225 14 Melanie 180 15 2. What is the estimated regression line? 3. What is the value of the residual associated with Steve? 4. Using the test statistic formula on the correlation coefficient, what is the value of the test statistic for determining if there is a linear relationship between income and education? 2
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5. Ignoring your result from question 4 , suppose you calculated the test statistic as 2.5. What would be the conclusion to your hypothesis test from question 4? t 0 . 1 , 3 = 1 . 64 t 0 . 05 , 3 = 2 . 35 t 0 . 025 , 3 = 3 . 18 a. Do not reject the null hypothesis, there is insufficient evidence that there is a linear relationship between income and education. b. Do not reject the null hypothesis, conclude that there is a linear relationship be- tween income and education. c. Reject the null hypothesis, there is insufficient evidence that there is a linear rela- tionship between income and education. d. Reject the null hypothesis, conclude that there is a linear relationship between income and education. e. Do not reject the null hypothesis, there is insufficient evidence that there is a positive relationship between income and education. Use the following information to answer the next 2 questions (6-7): Suppose you obtain the following partial regression output: ANOVA df SS MS F Regression 1 432 Residual 1786 Total 39
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