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In: Statistics and Probability

Suppose the sale of a particular product Y and the advertisement expenditure X assumes a two...

Suppose the sale of a particular product Y and the advertisement expenditure X assumes a two variable linear relation model given by Yj=α+βXj+ej, j=1, 2, ..., n
(a)Suppose that Xj are random variables and ej is the error term. State the necessary assumptions that enable the estimation and investigation of the estimators α ̂ and β ̂. [6 marks]
(b)Define a least square estimator of α and β which minimize the squared error
(c)Derive the least squares estimator of β. [6 marks] (d)Show that α ̂=Y ̅-β() [3 marks

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