ECON 3U03 Study Guide - Midterm Guide: Normal Distribution, Null Hypothesis, Test Statistic
14 Aug 2015
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1. (45 marks) female labour supply. (a) given that there are as many as 1,762 observations, we can use the standard normal distribution. The 99% con dence interval for the intercept is (24. 12 - 2. 58 * 3. 87, 24. 12 + 2. 58 * 3. 87) = (14. 13, 34. 10). (15 marks: if a wrong critical value, standard error, or mean is used, 7 marks are deducted. (b) the null hypothesis is h0 : 1 = 0 (3 marks). The alternative hypothesis is h1 : 1 (cid:54)= 0 (3 marks). The alternative hypothesis is h1 : 1 > 0 (3 marks). The test statistic is (0. 42-0)/0. 22 = 1. 91 (3 marks). Because the test statistic is greater than the critical value, we reject h0 and accept h1 (3 marks): note that you need not only reject the null, but also accept the alternative. 2 marks are deducted: the test statistic under the null is (0. 232 - 0) / 0. 100 = 2. 32 (5 marks).
