Using 20 o b se rv atio n s, th e follow ing reg ressio n o u tp u t is obtained from estim ating y = β0 + β 1x + β 2d + β 3xd + ε.

Coefficients Standard Error t Stat p -value Intercept 13.56 3.31 4.09 0.0009 x 4.62 0.56 8.31 0.0000 d – 5.15 4.97 – 1.04 0.3156 xd 2.09 0.79 2.64 0.0178

a. C om pute ŷ fo r x = 10 and d = 1 ;th en com pute ŷ for x = 10 and d = 0.

b. Are th e dum m y d and th e interaction x d variables individually significant at th e 5% level? Explain.

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