Use the data in TRAFFIC2 for this exercise. 1) Run an OLS regression of prcfat on a linear time trend, monthly dummy variables, and the variables wkends, unem, spdlaw, and beltlaw. Test the errors for AR(1) serial correlation using the regression in equation (12.20). Does it make sense to use the test that assumes strict exogeneity of the regressors? 2) Obtain serial correlation–and heteroskedasticity-robust standard errors for the coefficients on spdlaw and beltlaw, using four lags in the Newey-West estimator. How does this affect the statistical significance of the two policy variables? 3) Now, estimate the model using iterative Prais-Winsten and compare the estimates with the OLS estimates. Are there important changes in the policy variable coefficients or their statistical significance?

Sean lives in dallas and runs a business that sells boats. in an average year, he receives $722,000 from selling boats. of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also pays wages and utility bills totaling $268,000. he owns his showroom; if he chooses to rent it out, he will receive $2,000 in rent per year. assume that the value of this showroom does not depreciate over the year. also, if sean does not operate this boat business, he can work as a paralegal, receive an annual salary of $21,000 with no additional monetary costs, and rent out his showroom at the $2,000 per year rate. no other costs are incurred in running this boat business.identify each of sean's costs in the following table as either an implicit cost or an explicit cost of selling boats.implicit costexplicit costthe wages and utility bills that sean pays the rental income sean could receive if he chose to rent out his showroom the salary sean could earn if he worked as a paralegal the wholesale cost for the boats that sean pays the