This

**preview**shows pages 1-2. to view the full**7 pages of the document.**Eco311, Second Midterm Exam, Spring 2018.

Prof. Bill Even

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Your Name (Please print) ________________________________________

Your section (Please circle) 8:30 10:05

Your row (Please circle) 1 2 3 4 5

Directions

Place your answers to all questions in the space provided. Clearly circle your answer to each question

so that it can easily be distinguished from your work. Round all numerical answers to the nearest 100th

(e.g. 1.23) unless specifically told otherwise. Each question is worth 4 points unless otherwise

indicated.

The formula sheet and tables with the standard normal CDF and F-distribution are attached to the end

of the exam.

Only pages 1-2 are available for preview. Some parts have been intentionally blurred.

Eco311, Second Midterm Exam, Spring 2018.

Prof. Bill Even

-2-

Table 1 (provided in the attachment) provides the results of a regression of student grades in courses at

Miami University between 2008 and 2017. In addition to coefficients and standard errors, the model’s

total and residual sum of squares are provided along with the number of observations. The grade variable

is the standard numeric value assigned to letter grades and ranges from 0 (F) to 4 (A or A+) The control

variables used in table 1 include:

Female: dummy variable that equals one if the student is female; 0 otherwise.

Resident: dummy variable that equals one if the student is a resident of Ohio; 0 otherwise

High School GPA: The student’s grade point average in high school.

ACT Score: The student’s composite ACT score.

Use specification (1) to answer the questions below.

1) Construct a 95% confidence interval for the coefficient on the Ohio resident dummy variable.

2) What is R2 in specification (1)?

3) (6 points) If another control variable is added to the regression, indicate whether each of the following

statements is true (T) or false (F).

a) R2 cannot decrease.

b) Adjusted R2 will decrease unless the new variable has a t-statistic with an absolute value greater

than one.

c) Adjusted R2 will be less than R2

4) If the t-statistic for a coefficient is 1.50, what is the associated p-value for the null hypothesis that the

coefficient is zero? Give answer to nearest .01. (Note: the table for the standard normal distribution

is included attachments.)

5) Based on specification 1 in table 1, construct a t-statistic for the null hypothesis that Ohio residents

and non-residents earn the same grades.

a) What is the value of the t-statistic?

b) Can you reject the null hypothesis at the

i) .10 level of significance?

ii) .01 level of significance?

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