See attached file for questions 1(a-c), 2(a-c), 3(a-c). Please complete all parts of each question! The textbook for this course is:Introductory Econometrics, a Modern Approach, 7th Edition, by...

81282 assignment
Qno.1
a) Regarding errors mainly we assumed in regression that
1. The error terms have constant variance, a situation known as homoskedasticity. The non constant variance is known as heteroskedasticity.
2. The error terms must follow a normal distribution.
b) We cannot say whether CEV assumption is met in this model. Given that the gym_ex variable is measured with error. So we do not know whether they have constant variance and also whether they follow normal distribution.
c) It is practically not possible to spend more hours in gym if outdoor exercise is also done. In normal cases, thus outside hours exercise and gym hours can be expected to have a negative correlation. Hence assuming everyone is busy with other routines also, we say b4 in second equation would be less than b4 in the first equation.
i.e. whenever b5 is positive we can expect b4 to take lower values...