Please answer 2. The following Table gives data on output per hour (X) and real compensation per hour (Y) for thebusiness and nonfarm business sectors of the U.S. economy.YearYX199011219914181992730Estimate the variance of the slope of the OLS regression of Y on X (32) from the following regression:Y₁ = B1+ B₂X + U₁B₁ = Y - B₂ X8² ==Cov(X,Y)Σαλn-2Var(X)82var(B2)=x(30 points)

Let's move step by step. Covariance:Var(X):Hence,β2 = 27/84β2 = 0.32143 And,β1 = 4 - 0.32143*20β1 =…

Answered: 2. The following Table gives data on…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 1.3CE

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As an auto insurance risk analyst, it is your job to research risk profiles for various types of drivers. One common area of concern for auto insurance companies is the risk involved when offering policies to younger, less experienced drivers. The U.S. Department of Transportation recently conducted a study in which it analyzed the relationship between 1) the number of fatal accidents per 1000 licenses, and 2) the percentage of licensed drivers under the age of 21 in a sample of 42 cities. Your first step in the analysis is to construct a scatterplot of the data. FIGURE. SCATTERPLOT FOR U.S. DEPARTMENT OF TRANSPORATION PROBLEM U.S. Department of Transportation The Relationship Between Fatal Accident Frequency and Driver Age 4.5 3.5 3 2.5 1.5 1 0.5 6. 10 12 14 16 18 Percentage of drivers under age 21 Upon visual inspection, you determine that the variables do have a linear relationship. After a linear pattern has been established visually, you now proceed with performing linear…
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