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Refer to the problem below to answer questions 29 & 30: A marketing analyst wants to...

Refer to the problem below to answer questions 29 & 30: A marketing analyst wants to examine the relationship between sales (in $1,000s) and advertising (in dollars) for firms in the food and beverage industry and collects monthly data for 25 firms. The following table below shows a portion of the regression results. Coefficients Standard Error t-stat Intercept 40.1 14.08 Advertising 2.88 1.52 26. What is the Regression equation? 27. What is the test statistic value to test slope? 28. What is the Null and Alt Hypothesis to test that the slope is positive? 29. Predict the sales for a firm who spends $500 on advertising. A. $21,490 B. $21,490,000 C. $1480.10 D. none of the above 30. Using a significance level of .05, can the analyst conclude that there is a significant linear relationship between sales and advertising? A. t=1.895 is greater than tcrit=1.714, so reject Ho and conclude that there is a significant linear relationship between sales and advertising. B. t=2.848 is greater than tcrit=1.714, so reject Ho and conclude that there is a significant linear relationship between sales and advertising. C. t=1.895 is less than tcrit=2.069, so do not reject Ho and conclude that there is a significant linear relationship between sales and advertising. D. t=1.895 is less than tcrit=2.069, so do not reject Ho and cannot conclude that there is a significant linear relationship between sales and advertising.

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Answer #1

Solution: 26. What is the Regression equation?

Answer:

27. What is the test statistic value to test slope?

Answer: The test statistic value to test slope is:

28. What is the Null and Alt Hypothesis to test that the slope is positive?

Answer:

  

29. Predict the sales for a firm who spends $500 on advertising.

Answer:C. $14580.10

30. Using a significance level of .05, can the analyst conclude that there is a significant linear relationship between sales and advertising?

Answer: A. t=1.895 is greater than tcrit=1.714, so reject Ho and conclude that there is a significant linear relationship between sales and advertising.

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