test3ans-3u03-2011w - ECON 3U03: Test 3 Instructor:...

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ECON 3U03: Test 3 Instructor: Shintaro Yamaguchi March 29, 2011 1. Testing significance of model by F-test. (a) H 0 : β 2 = β 3 = 0. (5 marks) No partial credit. (b) H 1 : β 2 6 = 0, β 3 6 = 0, or both. (5 marks) No partial credit, even if it is consistent with a wrong H 0 . (c) SSE R , the SSE for the restricted model, is SSE R = 6 . 49 2 * ( 75 - 1 ) = 3116 . 8874 (4 marks). The test statistic is F = ( 3116 . 8874 - 1718 . 94 ) / 2 1718 . 94 / ( 75 - 3 ) = 698 . 9737 23 . 8741 = 29 . 2774 (3 marks). This follows F-distribution with (2, 72) degrees of freedom (3 marks). No other partial credit. (d) The closest critical value in the table is F 2 , 60 = 3 . 15 (3 marks). Because this is smaller than the test statistic, the null hypothesis is rejected (2 marks). If the conclusion is consistent with wrong test statistic and/or critical value, the last 2 marks may be awarded. No other partial credit. 2. F-test
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test3ans-3u03-2011w - ECON 3U03: Test 3 Instructor:...

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