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Tut2_Ques_7

# Tut2_Ques_7 - IQ Wage ο ο ο ο ο½ 1 region where...

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Question 7 a) 2824 . 101 IQ 05264 . 15 ) ( IQ sd b) IQ Wage 1 0 IQ Wage 30 . 8 99 . 116 n=935 c) When IQ=0, the expected salary is \$116.99, which does not make sense (if we denote IQ to have a minimum at 0). This suggests the relationship between salary and IQ in the equation may not hold for very low levels of IQ. In particular, we do not have any observations around the

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Unformatted text preview: IQ Wage ο ο ο ο« ο½ 1 region where IQ=0. The approximation is thus probably not very good at that region (Actually, the relationship between wage and IQ may well be non-linear in that region.) c) If IQ increases by 15 points, wage is expected to increase by 8.30 (15)= \$124.5...
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