Answered: Suppose that you know Bo = 0. Derive…

Suppose that you know Bo = 0. Derive the formula for the least squares estimator of B₁. The least squares objective function is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

Consider the regression model
Yi=bot Bi Xitui
Suppose that you know Bo = 0. Derive the formula for the least squares estimator of B₁.
The least squares objective function is
O A. n
O B.
O C.
O D.
E (Yi-bo-b1Xi)
i=1
n
Σ (Yi-bo-biXi)
i=1
2
n
Σ (v₁²-bo-b₁x₁²)
i=1
n
E (Yi-bo-b+Xi) 3
i=1

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