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Please explain how to solve the parts of this problem in details thank you Hypothesis Testing. Suppose now that we are interested in investigating the

Please explain how to solve the parts of this problem in details thank you

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Hypothesis Testing. Suppose now that we are interested in investigating the relationship between the size of someone's social circle, X, and their income (in tens of thousands of dollars), Y. We want to estimate the following linear regression model Y = Bo + BIX + e, E = E[EX] = 0. To do so we collect a random sample of size n = 64, {Y;, X; 64 }? and find that 1 ER_(X; - X)? = 100, I EL,(Y - Y)(X; - X) =225, Y = 5.5, and X = 1.5. (a) Using this information find and interpret B, and Bo- (b) After finding B1 and B1 describe how you would construct the estimated residuals e;. (c) We find that 1 J Ci=1 = 36. Use this and the result that, for n large, B1 - BI ~ N(0, 1), oB, / Vn to compute the (approximate) probability that, if the true value was given B1 = 0, we would see a value of |B1| equal to or larger than the one that we observed. (d) Use this result to test, at level a = 0.1, the hypotheses Ho : B1 = 0 vs. H1 : B1 # 0

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