Question

The founder of an application would like to understand how the demand of users varies with advertising spending. During the last 6 weeks, she collects the following user and advertising statistics : Week # users 452 523 487 576 687 6 / 475 costs 3 4 7 6 5 2 The manager considers the following regression model: Y; = Bo + B1X; +Ui, i = 1,.., 6 with Uị|X ~ii.d N(0,0%) (1) where Yi: “Number of active users in week i” and X;: “ Advertising spending in week i ſin $ 1000)”

Answer 1

Solution Yi- & B. UiNN (0,02) v. 6.) I BLUES I Null typothesis - Bi:10 Altanate sypothen ß 710 BLUE wing least square technique of regression, estimation of B - Souy - E (2-3) (yu) E (xi-x) - Sxx 3 E (9)= B = 3 (xi-3), m (disc) Sxx E ( 2-)? - Vasi E (ou -57 ) ) (Elxi. 3)?) os caii) o? 52 C sxoc Sxx under Ho 8.) - 8 - 10 & 2011) B=10/ BONCO, Sxal