Question

Weekly Gross Revenue ($1,000s)	Television Advertising ($1,000s)	Newspaper Advertising ($1,000s)
96	5	1.5
90	2	2
95	4	1.5
92	2.5	2.5
95	3	3.3
94	3.5	2.3
94	2.5	4.2
94	3	2.5

(a) Use α = 0.01 to test the hypotheses. find the test statistic and p-value.

x1	=	television advertising ($1,000s)
x2	=	newspaper advertising ($1,000s).

(b) Use α = 0.05 to test the significance of β₁. state the null and alternative hypotheses. find the test statistic and p-value. conclusion. should x1 be dropped from the model?

(c) Use α = 0.05 to test the significance of β₂. State the null and alternative hypotheses.

find the test statistic and p-value. state your conclusion. should x2 be dropped from the model?

Answer 1

Applying regression from excel: data: data analysis:

a)

test statistic F =28.38

p value =0.0019 ~ 0.002

b)

null hypothesis: Ho:               β1	=	0
Alternate Hypothesis: Ha: β1	≠	0

test statistic t =7.53

p value =0.0007 ~0.001

No x 1 should not be dropped

c)

null hypothesis: Ho:               β2	=	0
Alternate Hypothesis: Ha: β2	≠	0

test statistic t =4.06

p value =0.0098 ~0.010

no x2 should not be dropped