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THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

Question 210

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
A production manager is interested in modeling the determinants of the average cost of production.He creates the following model: Y = β0 + β1X1 + β2X2 + β3

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION: A production manager is interested in modeling the determinants of the average cost of production.He creates the following model: Y = β<sub>0</sub> + β<sub>1</sub>X<sub>1</sub> + β<sub>2</sub>X<sub>2</sub> + β<sub>3</sub> <sub> </sub> + ε,where X<sub>1</sub><sub> </sub>is the cost per unit of the primary input,and X<sub>2</sub> is the level of output.He examines the records over the past 45 production runs and obtains the following results: . -What would the manager's null and alternative hypotheses for testing the significance of β<sub>2</sub><sub> </sub>be? A) H<sub>0</sub> : β<sub>2</sub><sub> </sub>= 0 and H<sub>1</sub> : β<sub>2</sub> > 0 B) H<sub>0</sub> : β<sub>2</sub> > 0 and H<sub>1</sub> : β<sub>2</sub><sub> </sub>< 0 C) H<sub>0</sub> : β<sub>2</sub><sub> </sub>≠ 0 and H<sub>1</sub><sub> </sub>: β<sub>2</sub><sub> </sub>= 0 D) H<sub>0</sub> : β<sub>2</sub><sub> </sub>= 0 and H<sub>1</sub><sub> </sub>: 0 < β<sub>2</sub> < 1
+ ε,where X1 is the cost per unit of the primary input,and X2 is the level of output.He examines the records over the past 45 production runs and obtains the following results: THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION: A production manager is interested in modeling the determinants of the average cost of production.He creates the following model: Y = β<sub>0</sub> + β<sub>1</sub>X<sub>1</sub> + β<sub>2</sub>X<sub>2</sub> + β<sub>3</sub> <sub> </sub> + ε,where X<sub>1</sub><sub> </sub>is the cost per unit of the primary input,and X<sub>2</sub> is the level of output.He examines the records over the past 45 production runs and obtains the following results: . -What would the manager's null and alternative hypotheses for testing the significance of β<sub>2</sub><sub> </sub>be? A) H<sub>0</sub> : β<sub>2</sub><sub> </sub>= 0 and H<sub>1</sub> : β<sub>2</sub> > 0 B) H<sub>0</sub> : β<sub>2</sub> > 0 and H<sub>1</sub> : β<sub>2</sub><sub> </sub>< 0 C) H<sub>0</sub> : β<sub>2</sub><sub> </sub>≠ 0 and H<sub>1</sub><sub> </sub>: β<sub>2</sub><sub> </sub>= 0 D) H<sub>0</sub> : β<sub>2</sub><sub> </sub>= 0 and H<sub>1</sub><sub> </sub>: 0 < β<sub>2</sub> < 1
.
-What would the manager's null and alternative hypotheses for testing the significance of β2 be?


A) H0 : β2 = 0 and H1 : β2 > 0
B) H0 : β2 > 0 and H1 : β2 < 0
C) H0 : β2 ≠ 0 and H1 : β2 = 0
D) H0 : β2 = 0 and H1 : 0 < β2 < 1

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