Consider the following regression equation for the United States(standard errors in parentheses):
ﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつwhere: Ptﾃつﾃつﾃつﾃつﾃつ = per capitapounds of pork consumed in time period t
ﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつPRPt = the price of pork in time period t
ﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつPRBt = the price of beef in time period t
ﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつﾃつYDtﾃつﾃつ = per capita disposable income in timeperiod t
(a) Hypothesize signs and specify the appropriate null andalternative hypotheses for the coefficients of each of thesevariables.
(b) State your decision rules and then test your hypotheses onthe above results using the t-test at a 5% level ofsignificance.
(c) If you could add one variable to the regression, whatvariable would you add? Why?
