An estimated equation for the change in the price of a house as a function of its distance from a city center produced the following res with standard errors in parenthesis: APRICE =- 5 DIST+ 2 DIST® (0.5) (0.2) N-100, R=.30, cou (b,, by) = -0.1. Which of the following is correct regarding a test of the null hypothesis Ho: Ba+28 =-0.2 versus H1 : B2 + 2B3 # -0.2 O None of the above O Since no information is given about the SSE of the regression, we cannot test Ho. O Ho is not rejected with a 1% level of significance = 0 is imposed, we cannot test Ho. O Since no information is given about the results of a regression where the restriction B2 + 2B O Ho is rejected with a level of signifcance of 1%

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Chapter1: Combinatorial Analysis
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An estimated equation for the change in the price of a house as a function of its distance from a city center produced the following reslts
with standard errors in parenthesis:
APRICE = -5 DIST+ 2 DIST²
(0.5)
(0.2)
N-100, R .30, cou (by, by) = -0.1. Which of the following is correct regarding a test of the null hypothesis
Ho: Ba +283 = -0.2 versus H1 : B2 + 2B3 # -0.2
O None of the above.
O Since no information is given about the SSE of the regression, we cannot test Ho.
O Ho is not rejected with a 1% level of significance
O Since no information is given about the results of a regression where the restriction B2 + 2B3 = 0 is imposed, we cannot test He.
O Ho is rejected with a level of significance of 1%
Transcribed Image Text:An estimated equation for the change in the price of a house as a function of its distance from a city center produced the following reslts with standard errors in parenthesis: APRICE = -5 DIST+ 2 DIST² (0.5) (0.2) N-100, R .30, cou (by, by) = -0.1. Which of the following is correct regarding a test of the null hypothesis Ho: Ba +283 = -0.2 versus H1 : B2 + 2B3 # -0.2 O None of the above. O Since no information is given about the SSE of the regression, we cannot test Ho. O Ho is not rejected with a 1% level of significance O Since no information is given about the results of a regression where the restriction B2 + 2B3 = 0 is imposed, we cannot test He. O Ho is rejected with a level of significance of 1%
Expert Solution
Step 1

Given that regression equation is 
Price^=-5 (0.5)DIST+2(0.2)DIST2N=100R2=0.3Cov^b2,b3=-0.1

The null and alternate hypothesis to be tested are
H0: β2+2β3 = -0.2H1: β2+2β3  -0.2

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