Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.945724046 0.894393971 0.878563067 0.389665133 24 ANOVA of SS MS Significance F 56.46104232 Regression Residual 25.7044318 3.035064031 8.568143934 6.06992E-10 20 0. 151753202 Total 23 28.73949583 Upper 95% -3.42749564 -1.244934517 0.40246809 Coefficierts Standard Eror 0.623164211 Lower 95% t Stat 4.465633708 P-value -2.336215079 Intercept Economic Growth 0.000237013 0.27605404 0.060602236 4.565179101 0.000192394 0.149639991 Population Growth Meat Consumption 1.508025784 0.00860542 0.351713039 0.003093965 4.287659594 0.000359069 0.774365242 2.241686327 2.781356534 0.011522014 0.002151522 0.015059318

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Multiple regression is sometimes used in litigation. In the case of Cargill, Inc. v. Hardin (1971), the prosecution charged that the cash price of wheat was manipulated in violation of the Commodity Exchange Act. In a statistical study conducted for this case, a multiple regression model was constructed to predict the cash price of wheat using three supply-and-demand explanatory variables: economic growth, population growth, and meat consumption. Data for 24 years were used to construct the regression equation, and a prediction for the suspect period was computed from this equation.

The actual cash price of wheat under investigation in 1963 was $2.13. Based on the comparison of the correct predicted cash price calculated in the previous question and the actual cash price, what does the evidence suggest about Cargill, Inc.?
a. Because the predicted price is relatively close to the actual price (within one cent), Cargill, Inc. probably did not artificially manipulate the price of wheat.
b. Because the predicted price is not relatively close to the actual price (within one cent), Cargill, Inc. probably did artificially manipulate the price of wheat.
c. The R Square value indicates that the demand variables explain very little variance in the cash price of wheat; this model should not be used as evidence.
d. Multiple regression provides no meaningful value in a case like this and should not be used as evidence.



Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.945724046
0.894393971
0.878563067
0.389665133
24
ANOVA
of
SS
MS
Significance F
56.46104232
Regression
Residual
25.7044318
3.035064031
8.568143934
6.06992E-10
20
0. 151753202
Total
23
28.73949583
Upper 95%
-3.42749564 -1.244934517
0.40246809
Coefficierts
Standard Eror
0.623164211
Lower 95%
t Stat
4.465633708
P-value
-2.336215079
Intercept
Economic Growth
0.000237013
0.27605404
0.060602236
4.565179101
0.000192394
0.149639991
Population Growth
Meat Consumption
1.508025784
0.00860542
0.351713039
0.003093965
4.287659594
0.000359069
0.774365242 2.241686327
2.781356534
0.011522014
0.002151522 0.015059318
Transcribed Image Text:Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.945724046 0.894393971 0.878563067 0.389665133 24 ANOVA of SS MS Significance F 56.46104232 Regression Residual 25.7044318 3.035064031 8.568143934 6.06992E-10 20 0. 151753202 Total 23 28.73949583 Upper 95% -3.42749564 -1.244934517 0.40246809 Coefficierts Standard Eror 0.623164211 Lower 95% t Stat 4.465633708 P-value -2.336215079 Intercept Economic Growth 0.000237013 0.27605404 0.060602236 4.565179101 0.000192394 0.149639991 Population Growth Meat Consumption 1.508025784 0.00860542 0.351713039 0.003093965 4.287659594 0.000359069 0.774365242 2.241686327 2.781356534 0.011522014 0.002151522 0.015059318
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