Use the data DISCRIM to answer this question. These are ZIP code-level data on prices for various items at fast-food restaurants, along with characteristics of the zip code population, in New Jersey and Pennsylvania. The idea is to see whether fast-food restaurants charge higher prices in areas with a larger concentration of blacks.

1. The units of measurement of prpblck and income are ___________________________ and ___________________________ respectively. ( ___ / 3%)

The average values of prpblck and income in the sample are _______________ and ______________ respectively. ( ___ / 2%)

The standard deviations of prpblck and income are _______________ and ______________ respectively.

2. Consider the simple regression model to explain psoda using prpblck:

psodai=0+1prpblcki+ui (A)

Estimate this model by OLS and report the results in equation form, including the sample size, SSR, R-squared and .

c.terpret the estimated coefficient on prpblck in Model A.

d.Predict the change in psoda when prpblck changes from its minimum value to its maximum value in the sample.

e.To control for the effect of income on psoda, consider the model:

psodai=0+1prpblcki+2incomei+ui (B)

Estimate the model and report the estimation results. (Do NOT use scientific notation when reporting the estimates.)

F.Interpret the estimated coefficient on prpblck in Model B.

G.Test for the statistical significance of income on psoda using an F-test, stating the corresponding p-value, and drawing a diagram to show your conclusion.