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

+ ε,where X₁is 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:
.
-What would the manager's null and alternative hypotheses for testing the significance of β₂be?

Question

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

+ ε,where X₁is 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:

.
-What would the manager's null and alternative hypotheses for testing the significance of β₂be?

Quizplus · Accepted Answer

The null hypothesis (H0) typically states that there is no effect or no difference, which corresponds to β = 0 in this context. The alternative hypothesis (H1) suggests there is an effect or difference, indicated by β > 0 if we're testing for a positive effect.