Concept explainers
a:
Calculate the coefficient.
a:
Explanation of Solution
The value of coefficient (b1) can be calculated as follows:
The value of coefficient is 21.33.
The intercept (b0) value can be calculated as follows:
The value of intercept is 296.93.
The general regression equation can be written as follows:
The terms
Thus, the sample regression equation can be written as follows:
b:
Interpretation.
b:
Explanation of Solution
The coefficient indicates that increasing one unit of independent variable (advertisement) leads to increase in the dependent variable (customer) by 21.33.
c:
Testing the hypothesis.
c:
Explanation of Solution
Error sum of square (SSE) can be calculated as follows:
Error sum of square is 424,326.
The value of
The value of
Null hypothesis (H0) is
The t table value can be calculated as follows:
The t table value is 1.711.
The value of
The value of
Calculated t-value can be obtained as follows:
The t-value is 1.49. Since the calculated t-value is less than the t table value, the alternate hypothesis is not accepted.
d:
Coefficient of determination.
d:
Explanation of Solution
Coefficient of determination i
The coefficient for the determination is 0.0851. The R2 value indicates that a weak linear relationship exists between the independent variable and dependent variable.
e:
Interpretation.
e:
Explanation of Solution
Since the model reveals that a weak relationship exists between the independent and dependent variables, the prediction would not be accurate.
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Chapter 16 Solutions
Statistics for Management and Economics (Book Only)
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