4. Suppose the model is y₁ = a + Bxi + ei. You have the following data from the problem set 1: i Yi Xi i = 1 3 1 i = 2 5 1 i = 3 7 2 Compute (X'X)-¹ X'Y and show it produces the same estimates of a and ß you found in problem set 1.

7. The equation of the regression line is given by A. y = −116.01 + 0.12x B. y = 1321.32 − 7.64x C. y = 116.01 + 0.12x D. y = 7.64x + 1321.32

Given the “data” determined by y = x^3 + (x-1)^2 with x = 0.1, 1.2, 2.3, and 2.9, calculate SSTO, SSR, and R^2. Then recalculate these using x = 0.3, 1, 2.45, and 2.8. Does where you collect your data (i.e., which values of x) appear to impact your interpretation of how good the linear model fits?.