Let’s return to the model of iPod prices on eBay that was developed in Exercise 7 in Chapter 3. That equation was: PRICEi = 109.24 + 54.99NEWi - 20.44SCRATCHi + 0.73BIDRSi 15.342 15.112 10.592 t = 10.28 -4.00 1.23 N = 215 F = 55.09 where: PRICEi = the price at which the ith iPod

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Let’s return to the model of iPod prices on eBay that was developed in

Exercise 7 in Chapter 3. That equation was:

PRICEi = 109.24 + 54.99NEWi - 20.44SCRATCHi + 0.73BIDRSi

15.342 15.112 10.592

t = 10.28 -4.00 1.23

N = 215 F = 55.09

where: PRICEi = the price at which the ith iPod sold on eBay

NEWi = a dummy variable equal to 1 if the ith iPod was

new, 0 otherwise

SCRATCHi = a dummy variable equal to 1 if the ith iPod had a

minor cosmetic defect, 0 otherwise

BIDRSi = the number of bidders on the ith iPod

a. Create and test hypotheses for the coefficients of NEW and

SCRATCH at the 5-percent level.

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