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1. (20 points) You run a pilot experiment to determine the efficacy of a certain advertising campaign, before running it nationally. In 100 markets you

1. (20 points) You run a pilot experiment to determine the efficacy of a certain advertising campaign, before running it nationally. In 100 markets you run the advertising campaign, and in 100 markets you do not. Let R 1 be revenues in the markets where you ran the campaign, and R 0 be the revenues in the markets where you did not. You have the following data: Statistic Value R 1 1000 R 0 850 2 R1 500 2 R0 400 Suppose that the cost of the advertising campaign is C. a) Perform a two-sided test that the advertising campaign has any effect on revenues, regardless of cost

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