Question

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) Televison Advertising ($1000s) Newspaper Advertising ($1000s) 97 5 1.5 90 2 3 96 4 2.5 92 2.5 2.5 95 3 3.3 95 3.5 2.3 95 2.5 4.2 95 3 3.5 Use = .01 to test the hypotheses for the model y = 0 + 1 x 1 + 2 x 2 + , where Compute the F test statistic (to 2 decimals). Use F table. What is the p-value? What is your conclusion? Use = .05 to test the significance of 1. Compute the t test statistic (to 2 decimals). Use t table. What is the p-value? What is your conclusion? Should x 1 be dropped from the model? Use = .05 to test the significance of 2. Compute the t test statistic (to 2 decimals). Use t table. What is the p-value? What is your conclusion? Should x 2 be dropped from the model? Hide Feedback Partially Correct Check My Work Icon Key Question 2 of 2 Exercise 15.23 (Self-Test) Algorithmic

Answer 1

Using Minitab software, (Stat -> Regression -> Regression -> Fit Regression model), we get the following output :

To test the overall significance of the model,

The value of test statistic F = 42.89

P-value = 0.001

Since P-value < 0.01, so we reject the null hypothesis at 5% level of significance and we can conclude that the overall model is significant.

From the above table, it can be seen that both predictors x1 and x2 are significant, there is no need to drop any of the variables.