SCENARIO 14-5 A microeconomist wants to determine how corporate sales are influe
ID: 3368017 • Letter: S
Question
SCENARIO 14-5 A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by companies. She proceeds to randomly select 26 large corporations and record information in millions of dollars. SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square 0.830 0.689 0.662 17501.643 26 Standard Eror Observations ANOVA MS F Signif F Regression Residual Total 15579777040 7789888520 25.432 0.0001 23 7045072780 306307512 25 22624849820 Coeff StdError tStat P-value Intercept 15800.0000 6038.2999 2.617 0.0154 0.5485 0.0001 0.1245 7.0762 Capital 0.2045 0.609 1.4729 4.804 , wages Referring to Scenario 14-5, what fraction of the variability in sales is explained by spending on capital and wages? a) 27.0% b)-50.9% C)/ 68.9% d) 83.0% repordont(Y)Ha's predicted in i Referring to Scenario 14-5, which of the independent variables in the model are significant at the 5% level? a) Capital, Wages 0.00KD0S b) Capital o Wages d) None of the above Test on ope Criticel tolu ConclLis00 Referring to Scenario 14-5, which of the following values for & is the smallest for which the regression model as a whole is significant? a) 0.00005 b) 0.001 c) 0.01 d) 0.05 a. 15800.00Explanation / Answer
(first part) c. 68.9 % (you are right)
R-square=0.689 ( equivalent to 68.9%) is the propotion of variance explained by independent variables.
(second part) c. wage,
if p-value is less than alpha, then we reject the null hypothesis. here we can say if p-value is less than alpha, the regression coefficient will be significant
(third part) b. 0.001
since the p-value=0.0001 for regression , so required alpha=0.001 for which the p-value will be less than smallest alpha alpha.
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