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The relationship between sales and advertising expenditures (both estimated in millions of dollars) is estimated by applying least squares to a sample of n=13 markets. Results are given below (standard errors in parentheses). Use these results to answer the questions below. Assume the error term in the true population regression function is normally-distributed, but note the very small sample size. Sales = 550.0 (6.5) + 11.0 Advertising expenditures (4.0) 1. For purposes of computing confidence intervals or tests, what are the degrees of freedom for this problem? (Give a number.) 2. Test the null hypothesis that advertising does not affect sales, against the two-sided alternative hypothesis that advertising does affect sales (a two-tailed test) at 95 percent significance level. Give the test statistic, the critical value of the t-stat for a 95% confidence level or the p-value, and your conclusion (whether the null hypothesis can be rejected). 3. Suppose advertising expenditures were zero. Give a prediction for sales. 4. Suppose advertising expenditures were increased by 5 million dollars. Would sales likely increase or decrease? Give a prediction for the change in sales. 5. In the context of the question, is advertising economically significant?

The relationship between sales and advertising expenditures (both estimated in millions of dollars) is estimated by applying least squares to a sample of n=13 markets. Results are given below (standard errors in parentheses). Use these results to answer the questions below. Assume the error term in the true population regression function is normally-distributed, but note the very small sample size. Sales = 550.0 (6.5) + 11.0 Advertising expenditures (4.0) 1. For purposes of computing confidence intervals or tests, what are the degrees of freedom for this problem? (Give a number.) 2. Test the null hypothesis that advertising does not affect sales, against the two-sided alternative hypothesis that advertising does affect sales (a two-tailed test) at 95 percent significance level. Give the test statistic, the critical value of the t-stat for a 95% confidence level or the p-value, and your conclusion (whether the null hypothesis can be rejected). 3. Suppose advertising expenditures were zero. Give a prediction for sales. 4. Suppose advertising expenditures were increased by 5 million dollars. Would sales likely increase or decrease? Give a prediction for the change in sales. 5. In the context of the question, is advertising economically significant?

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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The relationship between sales and advertising expenditures (both estimated in millions of dollars) is estimated by applying least squares to a sample of n=13 markets. Results are given below (standard errors in parentheses). Use these results to answer the questions below. Assume the error term in the true population regression function is normally-distributed, but note the very small sample size. Sales = 550.0 (6.5) + 11.0 Advertising expenditures (4.0) 1. For purposes of computing confidence intervals or tests, what are the degrees of freedom for this problem? (Give a number.) 2. Test the null hypothesis that advertising does not affect sales, against the two-sided alternative hypothesis that advertising does affect sales (a two-tailed test) at 95 percent significance level. Give the test statistic, the critical value of the t-stat for a 95% confidence level or the p-value, and your conclusion (whether the null hypothesis can be rejected). 3. Suppose advertising expenditures were zero. Give a prediction for sales. 4. Suppose advertising expenditures were increased by 5 million dollars. Would sales likely increase or decrease? Give a prediction for the change in sales. 5. In the context of the question, is advertising economically significant? Use the editor to format your answer
Transcribed Image Text:The relationship between sales and advertising expenditures (both estimated in millions of dollars) is estimated by applying least squares to a sample of n=13 markets. Results are given below (standard errors in parentheses). Use these results to answer the questions below. Assume the error term in the true population regression function is normally-distributed, but note the very small sample size. Sales = 550.0 (6.5) + 11.0 Advertising expenditures (4.0) 1. For purposes of computing confidence intervals or tests, what are the degrees of freedom for this problem? (Give a number.) 2. Test the null hypothesis that advertising does not affect sales, against the two-sided alternative hypothesis that advertising does affect sales (a two-tailed test) at 95 percent significance level. Give the test statistic, the critical value of the t-stat for a 95% confidence level or the p-value, and your conclusion (whether the null hypothesis can be rejected). 3. Suppose advertising expenditures were zero. Give a prediction for sales. 4. Suppose advertising expenditures were increased by 5 million dollars. Would sales likely increase or decrease? Give a prediction for the change in sales. 5. In the context of the question, is advertising economically significant? Use the editor to format your answer
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Comment: As per the our company guidelines we are supposed to answer only three subparts. Kindly repost other parts in the next question. 

Solution:

Given information:

n= 13 observation 

k= 1 independent variable 

The estimated regression equation is 

Sales^= 550+11.0 Advertising expenditure 

 

 

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