What is the author assuming in going

Reference no: EM131961864

Problem

In a regression of average wages (W, $) on the number of employees (N) for a random sample of 30 firms, the following regression results were obtained*:

W = 7.5 + 0.009N (1)

t = n.a. (16.10) R2 = 0.90

W /N = 0.008 + 7.8(1/N) (2)

t = (14.43) (76.58) R2 = 0.99

a. How do you interpret the two regressions?

b. What is the author assuming in going from Eq. (1) to (2)? Was he worried about heteroscedasticity? How do you know?

*See Dominick Salvatore, Managerial Economics, McGraw-Hill, New York, 1989, p. 157/

Reference no: EM131961864

Questions Cloud

Demand curve and perfectly competitive firm demand curve : What is the difference between a monopolist's demand curve and a perfectly competitive firm's demand curve? Why are they different?

Produce in order to maximize profit : What happens to profit if the firm produces greater than or less than the optimal level of output?

Explain use of cash and internal controls to prevent fraud : Identify the principles of internal control. Explain the use of cash and internal controls to prevent fraud

What are your interests and hobbies in life : Design a developmentally appropriate questionnaire for individuals in the adolescent stage of development.

What is the author assuming in going : How do you interpret the two regressions? What is the author assuming in going from Eq. (1) to (2)? Was he worried about heteroscedasticity? How do you know?

Does your company use price discrimination : Does your company use price discrimination? Explain how the practice works of direct and indirect price discrimination works and estimate

Post a response of the given scenario : Management would like to just implement one of Deming's points each year. First, which of the points do you think is most important and why?

What is the gross profit percentage : Question - If net sales are $560,000, Cost of goods sold ($200,000) and Gross profits are $360,00? What is the gross profit percentage

Value of marginal product : How is Apple Inc. marginal product of labor related to the value of its marginal product? Provide a chart if applicable

User Account

All Pages