Question: Using 20 observations, the following regression output is obtained from estimating y = ? 0 + ? 1 x + ? 2 d + ?

Using 20 observations, the following regression output is obtained from estimating y = ?0 + ?1x + ?2d + ?3xd + ?.

Standard t Stat p-Value 4.09 Coefficients 13.56 13.56 4.62 Error Intercept 3.31

a. Compute y? for x = 10 and d = 1; compute y? for x = 10 and d = 0.

b. Are the dummy variable d and the interaction variable xd individually significant at the 5% level? Explain.

Standard t Stat p-Value 4.09 Coefficients 13.56 13.56 4.62 Error Intercept 3.31 0.001 0.000 0.316 0.56 4.97 8.31 - 1.04 -5.15 2.09 0.79 2.64 xd 0.018

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