You have estimated the demand for cigarettes using N=24 monthly observations on the price of cigarettes (P) and the quantity demanded for cigarettes (Qd) .The regression results follow:

Qd=350-25P, SSR=300

a.What isQd if the price of cigarettes is P=7? Qd=___________

b.The standard error of the slope coefficient is 11.Suppose we want to test the null hypothesis that that the estimated slope coefficient is zero versus the alternative that the slope coefficient is negative.That is,H_o: B1=0,H_A: B1<0.

i.Would this test be a one tail or two tail test?

ii.What is the appropriate critical t-value?Use a = 5% significance level.

ii.What is the calculated t-value if the standard error of B1=10?

iv.Do you reject or not reject the null?(use the t-table provided.)