Question

A regression model between sales (Y in $1,000), unit price (X1 in dollars) and television advertisement (X2 in dollars) resulted in the following function: = 7 - 3X1 + 5X2 For this model SSR = 3500, SSE = 1500, and the sample size is 18. test for the significance of the model, the test statistic F is a. 2.33 b. 0.70 c. 17.5 d. 1.75

Answer 1

C) 17.5

Explanation:

Required:

Test for the significance if the model.

Here, we are to find the F statistics.

Take the formula below:

`F = (MSR)/(MSE) = ((SSR)/(k))/((SSE)/(n - k - 1))`

Where,

SSR = 3500

SSE = 1500

Sample size, n = 18

k = 2

Substitute figures in the equation:

`F = ((3500)/(2))/((1500)/(18 - 2 - 1))`

`F = (MSR)/(MSE) = (1750)/((1500)/(15))`

`F = (MSR)/(MSE) = (1750)/(100)`

`F = 17.5`

F statistics = 17.5

Option (c) is correct.