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 follow.
Weekly Gross Revenue ($1000s) Television Advertising ($1000s) Newspaper Advertising ($1000s)
97 5 2.5
91 2 2
95 4 2.5
93 2.5 3.5
96 4 4.3
94 3.5 3.3
95 2.5 5.2
94 3 3.5
Use α = .01 to test the hypotheses for the model y = β0 + β1x1 + β2x2 + ε, where β0, β1, and β2 are coefficients.
Compute the F test statistic (to 2 decimals). Use F table.
What is the p-value?
Select: less than .01, between .01 and .025, between .025 and .05, between .05 and .10, greater than .10
What is your conclusion?
Select: The overall model is significant, The overall model is not significant
Use α = .05 to test the significance of β1. Compute the t test statistic (to 2 decimals). Use t table.
What is the p-value?
Select: less than .01, between .01 and .02, between .02 and .05, between .05 and .10, between .10 and .20, between .20 and .40, greater than .40
What is your conclusion?
Select: Significant relationship between television advertising and revenue, No significant relationship between television advertising and revenue
Should x1 be dropped from the model?
Select: Yes, x1 should be dropped from the model, No, x1 should not be dropped from the model
Use α = .05 to test the significance of β2. Compute the t test statistic (to 2 decimals). Use t table.
What is the p-value?
Select: less than .01, between .01 and .02, between .02 and .05, between .05 and .10, between .10 and .20, between .20 and .40, greater than .40
What is your conclusion?
Select: Significant relationship between newspaper advertising and revenue, No significant relationship between newspaper advertising and revenue
Should x2 be dropped from the model?
Select: Yes, x2 should be dropped from the model, No, x2 should not be dropped from the model
