Being able to read regression results can help the manager use the information to make right decisions particularly in developing a marketing strategy. Assume that you are interested in finding whether the advertisement has a significant positive effect on sales. Which of the following is correct? A. lower standard errors of the estimates are better than higher standard errors B. as a rule of thumb, you are correct 95 % of the time in concluding that there is a positive and significant relationship between the advertising expenditures and sales if the coefficient attached to advertising expenditure is positive and the “t” value is at least 2 C. there is a positive significant relationship between advertising expenditure and sales if both the lower bound and the upper bound of the confidence interval are positive. D. the R2 shows the proportion of the variation in the sales as explained by the model which consists of the advertising expenditure plus some other determinants of sales that you have included in the model E. all are correct If the model showing the effect of advertising expense on sale has an F value of 10.5 with a p value of 0.0345, an adjusted R2 of 0.74, advertising coefficient of 0.10 with a p value of 0.0215, which one is correct? A. 74% of the variation in sales is really attributed to the model which includes advertising expense as one of the explanatory variables. B. the coefficient of 0.10 attached to advertising expense indicates that for every unit of advertising expense, the sales increase by 0.10 unit. C. the p value of 0.0215 indicates that if we conclude that there is a positive significant relationship between advertising expense and sales, we are correct 97.85% of the time. D. we only commit an error of 3.45% in making a conclusion that the model as a whole is significant. E. all are correct

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 8E

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Being able to read regression results can help the manager use the information to make right decisions particularly in developing a marketing strategy. Assume that you are interested in finding whether the advertisement has a significant positive effect on sales. Which of the following is correct? A. lower standard errors of the estimates are better than higher standard errors B. as a rule of thumb, you are correct 95 % of the time in concluding that there is a positive and significant relationship between the advertising expenditures and sales if the coefficient attached to advertising expenditure is positive and the “t” value is at least 2 C. there is a positive significant relationship between advertising expenditure and sales if both the lower bound and the upper bound of the confidence interval are positive. D. the R2 shows the proportion of the variation in the sales as explained by the model which consists of the advertising expenditure plus some other determinants of sales that you have included in the model E. all are correct If the model showing the effect of advertising expense on sale has an F value of 10.5 with a p value of 0.0345, an adjusted R2 of 0.74, advertising coefficient of 0.10 with a p value of 0.0215, which one is correct? A. 74% of the variation in sales is really attributed to the model which includes advertising expense as one of the explanatory variables. B. the coefficient of 0.10 attached to advertising expense indicates that for every unit of advertising expense, the sales increase by 0.10 unit. C. the p value of 0.0215 indicates that if we conclude that there is a positive significant relationship between advertising expense and sales, we are correct 97.85% of the time. D. we only commit an error of 3.45% in making a conclusion that the model as a whole is significant. E. all are correct

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