A manager at a roadside cafe is concerned that the weak economic environment has caused a decline in sales. To offset the decline in sales, the manager has pursued a strong advertising campaign (billboards up and down the road). She believes advertising expenditures have a positive influence on sales. To support her claim, the manager estimates the following linear regression model: Sales = Bo + B1Unemployment + B2Advertising + E. A portion of the regression results is shown in the accompanying table. ANOVA df MS F Significance F 0.003 Regression 2 72.6374 36.3187 9.674 Residual 14 58.0438 4.1460 Total 16 130.681 Standard Coefficients Error t Stat p-Value Intercept 17.5060 3.9817 4.397 0.007 Unemployment Advertising -0.6879 0.2997 -2.296 0.038 0.0266 0.0068 3.932 0.022 What is the value of the test statistic regarding whether the predictor variables jointly influence sales (round to 3 decimal places)? At the 5% significance level, do the predictor variables jointly influence sales? (Y/N) Is Advertising negatively related with sales? (Y/N) Are both Unemployment and Advertising statistically significant in this model? (Y/N) What is most likely wrong with this model?

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A manager at a roadside cafe is concerned that the weak economic environment has caused a decline in sales. To offset the decline in sales, the manager has pursued a
strong advertising campaign (billboards up and down the road). She believes advertising expenditures have a positive influence on sales. To support her claim, the
manager estimates the following linear regression model: Sales = Bo + B1Unemployment + B2Advertising + E. A portion of the regression results is shown in the
accompanying table.
Significance F
0.003
ANOVA
df
MS
F
36.3187
Regression
Residual
2
72.6374
9.674
14
58.0438
4.1460
Total
16
130,681
Standard
Error
t Stat
p-Value
0.007
Coefficients
17.5060
3.9817
Intercept
Unemployment
Advertising
4.397
-0.6879
0.2997
-2.296
0.038
0.0266
0.0068
3.932
0.022
What is the value of the test statistic regarding whether the predictor variables jointly influence sales (round to 3 decimal places)?
At the 5% significance level, do the predictor variables jointly influence sales? (Y/N)
Is Advertising negatively related with sales? (Y/N)
Are both Unemployment and Advertising statistically significant in this model? (Y/N)
What is most likely wrong with this model?
Transcribed Image Text:A manager at a roadside cafe is concerned that the weak economic environment has caused a decline in sales. To offset the decline in sales, the manager has pursued a strong advertising campaign (billboards up and down the road). She believes advertising expenditures have a positive influence on sales. To support her claim, the manager estimates the following linear regression model: Sales = Bo + B1Unemployment + B2Advertising + E. A portion of the regression results is shown in the accompanying table. Significance F 0.003 ANOVA df MS F 36.3187 Regression Residual 2 72.6374 9.674 14 58.0438 4.1460 Total 16 130,681 Standard Error t Stat p-Value 0.007 Coefficients 17.5060 3.9817 Intercept Unemployment Advertising 4.397 -0.6879 0.2997 -2.296 0.038 0.0266 0.0068 3.932 0.022 What is the value of the test statistic regarding whether the predictor variables jointly influence sales (round to 3 decimal places)? At the 5% significance level, do the predictor variables jointly influence sales? (Y/N) Is Advertising negatively related with sales? (Y/N) Are both Unemployment and Advertising statistically significant in this model? (Y/N) What is most likely wrong with this model?
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