Null Hypothesis
H
0 : The population correlation coefficient IS NOT significantly different from zero. There IS NOT a significant linear relationship(correlation) between
x and
y in the population.
Alternate Hypothesis
H
a : The population correlation coefficient IS significantly DIFFERENT FROM zero. There IS A SIGNIFICANT LINEAR RELATIONSHIP (correlation) between
x and
y in the population.
Drawing a conclusion:
There are two methods of making the decision. The two methods are equivalent and give the same result.
Method 1: Using the
p -value
Method 2: Using a table of critical values
In this chapter of this textbook, we will always use a significance level of 5%,
α = 0.05
Note
Using the
p -value method, you could choose any appropriate significance level you want; you are not limited to using
α = 0.05. But the table of critical values provided in this textbook assumes that we are using a significance level of 5%,
α = 0.05. (If we wanted to use a different significance level than 5% with the critical value method, we would need different tables of critical values that are not provided in this textbook.)
Method 1: using a
p -value to make a decision
To calculate the
p -value using LinRegTTEST:
On the LinRegTTEST input screen, on the line prompt for
β or
ρ , highlight "
≠ 0 "
The output screen shows the p-value on the line that reads "p =".
(Most computer statistical software can calculate the
p -value.)
If the
p -value is less than the significance level (
α = 0.05):
Decision: Reject the null hypothesis.
Conclusion: "There is sufficient evidence to conclude that there is a significant linear relationship between
x and
y because the correlation coefficient is significantly different from zero."
If the
p -value is not less than the significance level (
α = 0.05)
Decision: DO NOT REJECT the null hypothesis.
Conclusion: "There is insufficient evidence to conclude that there is a significant linear relationship between
x and
y because the correlation coefficient is NOT significantly different from zero."
Calculation notes:
You will use technology to calculate the
p -value. The following describes the calculations to compute the test statistics and the
p -value:
The
p -value is calculated using a
t -distribution with
n - 2 degrees of freedom.
The formula for the test statistic is
. The value of the test statistic,
t , is shown in the computer or calculator output along with the
p -value. The test statistic
t has the same sign as the correlation coefficient
r .
The
p -value is the combined area in both tails.
An alternative way to calculate the
p -value
(p) given by LinRegTTest is the command 2*tcdf(abs(t),10^99, n-2) in 2nd DISTR.
The line of best fit is: ŷ = -173.51 + 4.83
x with
r = 0.6631 and there are
n = 11 data points.
Can the regression line be used for prediction?
Given a third exam score (
x value), can we
use the line to predict the final exam score (predicted
y value)?
H
0 :
ρ = 0
H
a :
ρ ≠ 0
α = 0.05
The
p -value is 0.026 (from LinRegTTest on your calculator or from computer software).
The
p -value, 0.026, is less than the significance level of
α = 0.05.
Decision: Reject the Null Hypothesis
H
0
Conclusion: There is sufficient evidence to conclude that there is a significant linear relationship between the third exam score (
x ) and the final exam score (
y ) because the correlation coefficient is significantly different from zero.
Questions & Answers
differentiate between demand and supply
giving examples
In economics, a perfect market refers to a theoretical construct where all participants have perfect information, goods are homogenous, there are no barriers to entry or exit, and prices are determined solely by supply and demand. It's an idealized model used for analysis,
When MP₁ becomes negative, TP start to decline.
Extuples Suppose that the short-run production function of certain cut-flower firm is given by: Q=4KL-0.6K2 - 0.112 •
Where is quantity of cut flower produced, I is labour input and K is fixed capital input (K-5). Determine the average product of lab
Kelo
Extuples Suppose that the short-run production function of certain cut-flower firm is given by: Q=4KL-0.6K2 - 0.112 •
Where is quantity of cut flower produced, I is labour input and K is fixed capital input (K-5). Determine the average product of labour (APL) and marginal product of labour (MPL)
Quantity demanded refers to the specific amount of a good or service that consumers are willing and able to purchase at a give price and within a specific time period. Demand, on the other hand, is a broader concept that encompasses the entire relationship between price and quantity demanded
Ezea
ok
Shukri
how do you save a country economic situation when it's falling apart
Economic growth as an increase in the production and consumption of goods and services within an economy.but
Economic development as a broader concept that encompasses not only economic growth but also social & human well being.
Shukri
production function means
Jabir
What do you think is more important to focus on when considering inequality ?
sir...I just want to ask one question... Define the term contract curve? if you are free please help me to find this answer 🙏
Asui
it is a curve that we get after connecting the pareto optimal combinations of two consumers after their mutually beneficial trade offs
Awais
thank you so much 👍 sir
Asui
In economics, the contract curve refers to the set of points in an Edgeworth box diagram where both parties involved in a trade cannot be made better off without making one of them worse off. It represents the Pareto efficient allocations of goods between two individuals or entities, where neither p
Cornelius
In economics, the contract curve refers to the set of points in an Edgeworth box diagram where both parties involved in a trade cannot be made better off without making one of them worse off. It represents the Pareto efficient allocations of goods between two individuals or entities,
Cornelius
Suppose a consumer consuming two commodities X and Y has
The following utility function u=X0.4 Y0.6. If the price of the X and Y are 2 and 3 respectively and income Constraint is birr 50.
A,Calculate quantities of x and y which maximize utility.
B,Calculate value of Lagrange multiplier.
C,Calculate quantities of X and Y consumed with a given price.
D,alculate optimum level of output .
the market for lemon has 10 potential consumers, each having an individual demand curve p=101-10Qi, where p is price in dollar's per cup and Qi is the number of cups demanded per week by the i th consumer.Find the market demand curve using algebra. Draw an individual demand curve and the market dema
suppose the production function is given by ( L, K)=L¼K¾.assuming capital is fixed find APL and MPL. consider the following short run production function:Q=6L²-0.4L³ a) find the value of L that maximizes output b)find the value of L that maximizes marginal product
