Question

Test H0: b₂ = 0, b₃ = 0, and b₄ = 0 in the model Price = b₀ + b₁Assess + b₂LotSize + b₃SqrFt + b₄Bdrms + u. The R-squared from estimating this model using the same 88 houses is 0.829.

a) Accept H0
b) Reject H0
c) Calculate p-value
d) Determine confidence interval

Answer 1

The given hypothesis test is testing the coefficients of the independent variables in a multiple linear regression model. The null hypothesis H0 states that the coefficients for b₂, b₃, and b₄ are all equal to zero. Option C is correct.

Step-by-step explanation:

The given hypothesis test is testing the coefficients of the independent variables in a multiple linear regression model. The null hypothesis H0 states that the coefficients for b₂, b₃, and b₄ are all equal to zero. To determine whether to accept or reject H0, we can calculate the p-value.

The p-value is the probability of observing a sample result as extreme as what was observed, assuming that H0 is true. If the p-value is less than the significance level (α), we reject H0. If the p-value is greater than α, we fail to reject H0. In this case, the R-squared value of 0.829 indicates that approximately 82.9% of the variability in the dependent variable (Price) is explained by the independent variables.

To determine whether to accept or reject H0, we would need to calculate the p-value for b₂, b₃, and b₄. Since the p-value is not given, we cannot determine the outcome of the hypothesis test or the confidence interval. Therefore, the correct answer is option c) Calculate p-value.

To determine whether to accept or reject H0, we can calculate the p-value. The p-value is the probability of observing a sample result as extreme as what was observed, assuming that H0 is true.