Using 50 observations the following regression output is obt

Using 50 observations, the following regression output is obtained from estimating y Bo B1 B2d1 B3d2 E. Standard Coefficients Error t Stat p-value Intercept -0.78 0.40 1.95 0.0573 2.60 0.0125 0.75 0.4571 3.90 1.50 2.60 16.80 5.10 1.50 3.40 0.0014 a. Compute y-hat for x 246, d1 1, and d2 0; then compute y hat for x 246, d130, and d2 1 (Do not round intermediate calculations. Round your answers to 2 decimal places. d1 1 and d2 d1 0 and d2 b-1. Interpret d1. O When d 1, hat is 12.6 units less when d 0, holding everything else constant. O When d1 1, y hat is 12.6 units greater than when d1 0, holding everything else constant. O When d 1, hat is 5.1 units less than when d 0, holding everything else constant. O When d 1, y hat is 5.1 units greater than when d1 0, holding everything else constant. b-2. Interpret d2. O When d2 1 hat is 12.6 units less than when d2 0, holding everything else constant. O When d2 1, hat is 12.6 units greater than when d2 *0, holding everything else constant. O When d2 1 hat is 5.1 units less than when d2 0,holding everything else constant. G When d2 1, y hat is 5.1 units greater than when d2 *0, holding everything else constant b-3. Are both dummy variables individually significant at the 5% level? o No, only the dummy variable d2 is significant at 5% lev O Yes, both dummy variables are individually significant at the 5% level. O No, only the dummy variable d1 is significant at 5% level. O No, both dummy variables are not individually significant at 5% level.

Solution

a) y = -0.78+3.90x-12.60d1+5.10d2

x = 246. d1 =1 and d2 =0

y = -0.78+959.4-12.60

= 946.02

x = 246, d1 =0 and d2 =1

y = -0.78+959.4+5.10

=963.72

b1) Option 1

b2) Option4

b3) Set up null and alternate for d1 and d2

H0: d1 =0

Ha: d1 not equal to 0

t = -12.60/16.80=-0.75

df = 48

p value = 0.4569

As p>0.4569, d1 is significant.

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H0: d1 =0

Ha: d1 not equal to 0

t = -12.60/16.80=-0.75

df = 48

p value = 0.4569

As p>0.05, d1 is not significant.

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H0: d2 =0

Ha: d2 not equal to 0

t = 5.1/1.5

= 3.4

df = 48

p value =0.00136

As p<0.05, d2 is significant.

b3) Option 1