Question

The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks fol low. Weekly Gross Televison Newspaper Advertising Advertising Revenue ($1000s) ($1000s) ($1000s) 96 6 2.5 91 2 2 95 5 2.5 93 3.5 2.5 95 3 4.3 95 4.5 3.3 94 2.5 4.2 95 4 3.5 a. Use a 0.01 to test the hypotheses Но : 81 3 В2 —0 Ha 81 and/or 82 is not equal to zero for the model y = Bo B11 + 82r2 +e, where X1television advertising ($1000s) 2 newspaper advertising ($1000s) Compute the F test statistic (to 2 decimals). Use F table What is the p-value? Select your answer What is your conclusion? Select your answer 0.05 to test the significance of B1. Compute the t test statistic (to 2 decimals). Use t table. b. Use a=

Answer 1

Solution:

We can use the excel regression data analysis tool to answer the given questions, the excel output is given below:

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.9945
R Square	0.9891
Adjusted R Square	0.9847
Standard Error	0.1953
Observations	8
ANOVA
	df	SS	MS	F	Significance F
Regression	2	17.3094	8.6547	226.9956	0.0000
Residual	5	0.1906	0.0381
Total	7	17.5
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	86.29461	0.39933	216.09650	0.00000	85.26809	87.32113
Television Advertising ($1000s)	1.10980	0.05720	19.40048	0.00001	0.96275	1.25685
Newspaper Advertising ($1000s)	1.20138	0.08910	13.48397	0.00004	0.97235	1.43041

a. Use a 0.01 to test the hypotheses Ho: 20 and/or 2 is not equal to zero Ha for the model y=BB 22 , where 1television advertising ($1000s) 2newspaper advertising ($1000s) Compute the F test statistic (to 2 deci mals). Use F table. 227.00 What is the p-value? - Select your answer less than 0.01 What is your conclusion? Regression equation is significant Select your answer b. Use a 0.05 to test the significance of B1. Compute the t test statistic (to 2 decimals). Use t table. 19.40 What is the p-value? Select your answer-less than 0.01 or less than 0.05 What is your conclusion? Select your answer- x1 is significant Should # be droppedfrom the model? Select your answer No

c.Use a = 0.05 to test the significance of B. Compute the t test statistic (to 2 decimals). Use t table. 13.48 What is the p-value? Select your answer-less than 0.01 or less than 0.05 What is your conclusion? Select your answer- x2 is significant Should 2 be dropped rom the model? Select your answer - No