General Instruction: Attempt all of the following questions briefly. 1. Econometrics is the amalgamation of 3 disciplines: These are (3 pt.) a. b, 2, What are the basic assumptions of the OLS Method? (3 pt.) 3, What is the difference between Economic model and Econometrics Model? (2 pt)Suppose a researcher is interested to examine the relationship between demand for kerosene (Y) and the income of the consumer (X). Let the following data represents the information on the above stated variables for 12 month. MONTH | Y(in |X liter | (in s) | bir) 7 | 100 | 500 2 | 120 | 580 3 90 | 700 4 | 730 | 650 5 | 180 | 800 6 | 140 | 800 7 | 130 | 875 & | 720 | 900 9 | 110 | 900 70 | 100 | 105 07 90 | 120 12 700 | 140 Based on the information given above, attempt the following questions: 1. Compute and interpret the correlation between Y and X. (1 pt.) 2. Compute the slope and the intercept ( 2 pt.) 3. Write the regression equation( 1 pt.)4, Calculate the variance and standard deviation of each variable. (2 pt.) 5. Calculate the average income elasticity of demand for kerosene. (1 pt.) (3 pt.) Show mathematically the derivation of the parameter estimates (both the slope and intercept) of simple linear regression using the Ordinary Least Square (OLS ) Method. 4