Solved

TABLE 14-6 One of the Most Common Questions of Prospective House Buyers

Question 64

Multiple Choice
TABLE 14-6 One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y). To provide its customers with information on that matter, a large real estate firm used the following 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X₁) the amount of insulation in inches (X₂), the number of windows in the house (X₃), and the age of the furnace in years (X₄). Given below are the Excel outputs of two regression models. Model 1 Model 2 -Referring to Table 14-6, what is your decision and conclusion for the test H₀: β₂ = 0 vs H₁: β₂ < 0 at the α = 0.01 level of significance using Model 1? A) Do not reject H₀ and conclude that the amount of insulation has a linear effect on heating cots. B) Reject H₀ and conclude that the amount of insulation does not have a linear effect on heating costs. C) Reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs. D) Do not reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs.

TABLE 14-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) . To provide its customers with information on that matter, a large real estate firm used the following 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X₁) the amount of insulation in inches (X₂) , the number of windows in the house (X₃) , and the age of the furnace in years (X₄) . Given below are the Excel outputs of two regression models.
Model 1
TABLE 14-6 One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) . To provide its customers with information on that matter, a large real estate firm used the following 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X₁) the amount of insulation in inches (X₂) , the number of windows in the house (X₃) , and the age of the furnace in years (X₄) . Given below are the Excel outputs of two regression models. Model 1 Model 2 -Referring to Table 14-6, what is your decision and conclusion for the test H₀: β₂ = 0 vs H₁: β₂ < 0 at the α = 0.01 level of significance using Model 1? A) Do not reject H₀ and conclude that the amount of insulation has a linear effect on heating cots. B) Reject H₀ and conclude that the amount of insulation does not have a linear effect on heating costs. C) Reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs. D) Do not reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs.
Model 2
TABLE 14-6 One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) . To provide its customers with information on that matter, a large real estate firm used the following 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X₁) the amount of insulation in inches (X₂) , the number of windows in the house (X₃) , and the age of the furnace in years (X₄) . Given below are the Excel outputs of two regression models. Model 1 Model 2 -Referring to Table 14-6, what is your decision and conclusion for the test H₀: β₂ = 0 vs H₁: β₂ < 0 at the α = 0.01 level of significance using Model 1? A) Do not reject H₀ and conclude that the amount of insulation has a linear effect on heating cots. B) Reject H₀ and conclude that the amount of insulation does not have a linear effect on heating costs. C) Reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs. D) Do not reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs.
-Referring to Table 14-6, what is your decision and conclusion for the test H₀: β₂ = 0 vs H₁: β₂ < 0 at the α = 0.01 level of significance using Model 1?


A) Do not reject H₀ and conclude that the amount of insulation has a linear effect on heating cots.
B) Reject H₀ and conclude that the amount of insulation does not have a linear effect on heating costs.
C) Reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs.
D) Do not reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q59: TABLE 14-5
A microeconomist wants to determine how

Q60: TABLE 14-4
A real estate builder wishes to

Q61: TABLE 14-6
One of the most common questions

Q65: TABLE 14-5
A microeconomist wants to determine how

Q66: TABLE 14-5
A microeconomist wants to determine how

Q67: TABLE 14-5
A microeconomist wants to determine how

Q68: In calculating the standard error of the

Q69: TABLE 14-6
One of the most common questions

Q96: The interpretation of the slope is different

Q98: The slopes in a multiple regression model

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents