Quiz

1. (a) \(E(u_i) = 0\) This is because, only if this is the case, the line will pass through the center of the sample points
2. (d) All Figure out on your own
3. (b) \(\beta_1 - \beta_2P + \beta_3 P^2 + u\) We need a squared-term, so that we get a U-Shaped graph
4. (a) Uni-directional This question is only about the direction of relationship between the variables; not the magnitude. Sir asked in the question the nature of this specified relationship. not what i would choose.
5. (a) \(E[Y|X_i]\) Check textbook
6. (d) Random changes in \(y\) Check textbook
7. © \(P_t = \alpha_2 A + e_i\) This is because, there is no error term
8. (d) output level of various firms because in regression, we assume that the dependent variable is random
9. © are perfect/exact approximates for \(\beta_1, \beta_2\) because there is no error
10. (b) The quantity demand will increase by 0.2 unite when \(P_\text{cok}\) increases by 1 unit, on average Check textbook

Comments