- Question One 1 For A Sample Of 30 Firms You Estimate The Following Marginal Cost Function And Obtain The Following Resu 1 (52.47 KiB) Viewed 50 times
For a sample of 30 firms you estimate the following marginal cost function and obtain the
following results (where Y is marginal cost, X is output):
Y = 110 + 20x
R2 = 0.8 ........
.............model 1
Then you obtain the residuals and decide to check whether the above model is correctly specified.
You then estimate the auxiliary regression and obtain the following results:
, = 130 +25X, -50x}
R? = 0,95 ................model 2
What is the name of this test? [2 marks.
b. Calculate the Chi-square value. Based on your calculated Chi-square value and given that
the 5% critical Chi-iquare value is about 9.21, would you say model 1 is correctly specified or For a sample of 30 firms you estimate the following marginal cost function and obtain the
following results (where Y is marginal cost, X is output):
Y = 110 + 20x
R2 = 0.8 ........
.............model 1
Then you obtain the residuals and decide to check whether the above model is correctly specified.
You then estimate the auxiliary regression and obtain the following results:
, = 130 +25X, -50x}
R? = 0,95 ................model 2
What is the name of this test? [2 marks.
b. Calculate the Chi-square value. Based on your calculated Chi-square value and given that
the 5% critical Chi-iquare value is about 9.21, would you say model 1 is correctly specified or For a sample of 30 firms you estimate the following marginal cost function and obtain the
following results (where Y is marginal cost, X is output):
Y = 110 + 20x
R2 = 0.8 ........
.............model 1
Then you obtain the residuals and decide to check whether the above model is correctly specified.
You then estimate the auxiliary regression and obtain the following results:
, = 130 +25X, -50x}
R? = 0,95 ................model 2
What is the name of this test? [2 marks.
b. Calculate the Chi-square value. Based on your calculated Chi-square value and given that
the 5% critical Chi-iquare value is about 9.21, would you say model 1 is correctly specified or not ? what is your conclusion
QUESTION ONE 1. For a sample of 30 firms you estimate the following marginal cost function and obtain the following results (where Y is marginal cost, X is output): Y = 110 + 20% R2 = 0.8. ...model 1 Then you obtain the residuals and decide to check whether the above model is correctly specified. You then estimate the auxiliary regression and obtain the following results: â, = 130 +25%, -50x R2 = 0.95 ..........model 2 a. What is the name of this test? [2 marks] b. Calculate the Chi-square value. Based on your calculated Chi-square value and given that the 5% critical Chi- quare value is about 9.21, would you say model 1 is correctly specified or not? What is your conclusion (8 marks).