a. Let x equal advertising expenditures and y equal revenue. Use the method of least squares to develop a straight line approximation of the relationship between the two variables. b. Test whether revenue and advertising expenditures are related at a .05 level of significance. c. Prepare a residual plot of y-ŷ versus ŷ. Use the result from part (a) to obtain the values of ŷ. d. What conclusions can you draw from residual analysis? Should this model be used, or should we look for a better one?
a. Let x equal advertising expenditures and y equal revenue. Use the method of least squares to develop a straight line approximation of the relationship between the two variables. b. Test whether revenue and advertising expenditures are related at a .05 level of significance. c. Prepare a residual plot of y-ŷ versus ŷ. Use the result from part (a) to obtain the values of ŷ. d. What conclusions can you draw from residual analysis? Should this model be used, or should we look for a better one?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:Data on advertising expenditures and revenue
(in thousands of dollars) for the Four Seasons
Restaurant follow.
Advertising Expenditures Revenue
1
19
2
32
4
44
40
10
52
14
53
20
54
Transcribed Image Text:a. Let x equal advertising expenditures
and y equal revenue. Use the method of
least squares to develop a straight line
approximation of the relationship
between the two variables.
b. Test whether revenue and advertising
expenditures are related at a .05 level of
significance.
c. Prepare a residual plot of y- ŷ versus
ý. Use the result from part (a) to obtain
the values of ŷ.
d. What conclusions can you draw from
residual analysis? Should this model be
used, or should we look for a better one?
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