Question

A real estate agent in a large city wants to predict the weekly rent for apartments based on the apartment size in square metres. A random sample of 42 apartments was selected and a simple linear regression estimation made using information about size and rent. The belief is that the larger the apartment size the higher the rent. To test this belief using a 1% level of significance, the critical value of the test statistic would be _____________ (three decimal places).

Answer 1

GIVEN DATA:

claim:  The larger the apartment size the higher the rent

( one tailed test)

n= 42

f = n-1 = 42-1 =41

df = 41

critical value  

from t table at df = 41 alpha = 0.01 is 2.421

= + 2.421

To test this belief using a 1% level of significance, the critical value of the test statistic would be _+2.421_