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Problem(1): You are given the following estimated regression equation involving a dependent and two independent variables: ŷ = 22.8 + 19x1 + 5.56x2 a. Interpret the values of the slope coefficients in the equation. b. Estimate the value of the dependent variable when x1 = 10 and x2 = 5. Problem(2): Consider the following regression model: y = b0 + b1x1 + b2x2 + ε where: x1 = a quantitative variable x2 = 1 if x1<40 x2 = 0 if x1>=40 Assume the estimated regression equation is : ŷ = 30.5 + 2.1 x1 + 6.3 x2 a. Provide the estimated regression equation for instances in which x1 < 40. b. Determine the value of y when x1 = 20. c. Provide the estimated regression equation for instances in which x1 > 40. d. Determine the value of y when x1 = 55. Answers(1): a. b1 = 19. This implies that, holding x2 constant and increasing x1 by one unit, the average y is estimated to increase by 19 units. b2 = 5.56. This implies that, holding x1 constant and increasing x2 by one unit, the average y is estimated to increase by 5.56 units. b. yö =22.8 + 19(10) +5.56(5) =240.6 Answers(2): a. b. c. d. yˆ = 30.5 + 2.1x1 + 6.3(1) = 36.8 + 2.1x1 yˆ = 30.5 + 2.1(20) + 6.3(1) = 78.8 yˆ = 30.5 + 2.1 x1 + 6.3(0) = 30.5 + 2.1x1 yˆ = 30.5 + 2.1(55) + 6.3(0) = 146