Suppose the following S shape of the total cost curve can be captured by the following cubic or third-degree polynomial: Y- bo + b,X + b,X? + byX +u Where, Y = total cost and X - output. Consider the following regression results: . Y = 141.77 + 63.48X - 12.96x2 +0.94X SE(bo) = 6.3753, SE(b,) = 4.7786, SE(b2) = 0.9857, SE(b3) = 0.0591 Cov(bz, ba) = -0.0576, R? = 0.9983, to.025, 12) = 2.179 1. Interpret this regression model 2. Test the hypothesis that bị = 0 3. Test the hypothesis that b2 = 12 4. Test the hypothesis that ba = 1 5. Test the hypothesis that (b2 - b3) = 0

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Suppose the following S shape of the total cost curve can be captured by the following cubic or third-degree
polynomial:
Y- bo + b,X + b,X?+ bX +u
Where, Y = total cost and X - output.
Consider the following regression results: .
Y = 141.77 + 63.48X - 12.96x2 +0.94X
SE(bo) = 6.3753, SE(b;) = 4.7786, SE(b2) = 0.9857, SE(ba) = 0.0591
Cov(bz, b3) = -0.0576, R? = 0.9983, tro.025, 12) = 2.179
1. Interpret this regression model
2. Test the hypothesis that b; = 0
3. Test the hypothesis that b2 = 12
4. Test the hypothesis that ba = 1
5. Test the hypothesis that (b2 - b3) = 0
Transcribed Image Text:Suppose the following S shape of the total cost curve can be captured by the following cubic or third-degree polynomial: Y- bo + b,X + b,X?+ bX +u Where, Y = total cost and X - output. Consider the following regression results: . Y = 141.77 + 63.48X - 12.96x2 +0.94X SE(bo) = 6.3753, SE(b;) = 4.7786, SE(b2) = 0.9857, SE(ba) = 0.0591 Cov(bz, b3) = -0.0576, R? = 0.9983, tro.025, 12) = 2.179 1. Interpret this regression model 2. Test the hypothesis that b; = 0 3. Test the hypothesis that b2 = 12 4. Test the hypothesis that ba = 1 5. Test the hypothesis that (b2 - b3) = 0
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