Let us consider the following regression model for a sample of n 3rd grade students

TestScorei = ?0 + ?1SmallClassi + ui , i = 1, . . . , n,

where SmallClassi is a binary variable that takes value 1 if the student belongs to a small class and 0 otherwise; and T estScore is the student's score in a standardized test taken at the end of the year.

Let TestScore = Y and SmallClass = X. Also let n1 the number of students who attend small classes and n0 the number of students who attend large classes, such that n0 + n1 = n.

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