1. Akiko Hamaguchi is a manager at a small sushi restaurant in Phoenix, Arizona.
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Question
1. Akiko Hamaguchi is a manager at a small sushi restaurant in Phoenix, Arizona. Akiko is concerned that the weak economic environment has hampered foot traffic in her area, thus causing a dramatic decline in sales. In order to offset the decline in sales, she has pursued a strong advertising campaign. She believes advertising expenditures have a positive influence on sales. To support her claim, Akiko estimates the following linear regression model: Sales Be + | Unemployment + Advertising + . A portion of t e regression results is shown in the accompanying table. NOVA egression F Significance F 72.6374 363187 8.760 58.04384.1460 130.681 0.0034 14 otal 16 Standard Lower Upper Coefficients Error tstat p-value 95% 17.5060 3.981743966 0.00068.97 26.05 nemployment-0,6879 0.299722955 003733-0.05 0.02660.0068 3.9322 0.0015 0.01 0.04 tercept dvertising At the 5% significance level, test whether the explanatory variables jointly influence sales. At the 1% significance level, test whether the unemployment rate is negatively related with sales. At the 1%significance level, test whether advertising expenditures are positively related with sales. a. b, C.Explanation / Answer
a)
Here we need to use F test statistics. The test statistics is
F = 8.760
The p-value is : 0.0034
Since p-value is less than 0.05 so we can conlude that the explanatory variables jointly influence sales.
b)
The p-value for unemployment rate is 0.0377.
Since p-value is greater than 0.01 so we cannot conclude that unemployment rate is significant to the model.
c)
The p-value for advertising is 0.0015.
Since p-value is less than 0.01 so we can conclude that advertising is significant to the model. It signs is positive so it shows that advertising is positively related with sales.
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