Question

A cafe bookshop also has bakery products in their menu. The owner wants to know whether bakery sales are associated with an increase in their book sales. She consults her statistician friend who decides to investigate this using linear regression. She randomly chooses 30 days of revenue collection from the last 16368 days the cafe has been open and obtains the following output. All revenue is calculated in USD. Relevant Statcrunch output is below. Assume all conditions for linear regression are met. Book revenue = 120 +2.08*Bakery revenue df T-stat p-value Parameter Intercept Bakery revenue Estimate 120 Std. Err. 10 0.8 Alternative 0 +0 Determine the appropriate number of degrees of freedom for the test statistic for the hypothesis test selected Calculate the appropriate test statistic to test the hypotheses selected, accurate to one decimal place. Suppose the P-value of the hypothesis test were 0.0012. (It's not.) What would be the appropriate conclusion at an a = 0.05 level?

a. We fail to reject the null hypothesis and conclude that we have evidence to believe that there is not a linear relationship between bakery sales and book sales.
b. We reject the null hypothesis and conclude that we have evidence to believe that there is not a linear relationship between bakery sales and book sales
c. We reject the null hypothesis and conclude that we have evidence to believe that there is a linear relationship between bakery sales and book sales.
d. We fail to reject the null hypothesis and conclude that we do not have evidence to believe that there is a linear relationship between bakery sales and book sales.

Answer 1

b

Explanation:

null hypothesis will be book sales are related to bakery sales.

We reject null hypothesis if we do not have statistical evidence that there is significant relationship between book sales and bakery sales.