Question

Does a linear association exist between advertising expenditure and company sales? Perform the appropriate hypothesis test using a 5% significance level. Compute the test statistic value.

Parameter Estimate Standard Error

Intercept 104.062 14.845

Slope 50.730 9.259

	t=104.062/50.730, df=8-2=6
	t=50.730/9.259, df=8-2=6
	t=104.062/14.845, df=8-2=6
	t=50.730/9.259, df=8-1=5

Does a linear association exist between advertising expenditure and company sales? Perform the appropriate hypothesis test using a 5% significance level. State the null and alternative hypothesis.

	H0: beta_1=0 vs. Ha: beta_1 not equal to 0
	H0: b_0=0 vs. Ha: b_0 not equal to 0
	H0: b_1=0 vs. Ha: b_1 not equal to 0
	H0: beta_0=0 vs. Ha: beta_0 not equal to 0

A marketing manager conducted a study to determine the relationship between money spent on advertising (X) and company sales (Y). Parameter estimates with standard errors are given next:

Parameter Estimate Standard Error

Intercept 104.062 14.845

Slope 50.730 9.259

Choose an appropriate regression equation to predict the company sales (Y) with the average money spent on advertising (X).

	Y_hat = 50.730+9.259X
	Y_hat = 104.062+14.845X
	Y_hat = 104.062+50.730X
	Y_hat = 50.730+104.062X

A marketing manager conducted a study to determine the relationship between money spent on advertising (X) and company sales (Y). The study consisted of 8 companies and the data is given below and is in units of $1000s (ie. 2.4 = $2400.00, 225 = $225,000):

X: 2.4 1.6 2.0 2.6 1.4 1.6 2.0 2.2

Y: 225 184 220 240 180 184 186 215

Report independent and dependent variable.

	Dependent (Predictor) - Company sales (X), Independent (Response) - Advertising (Y)
	Dependent (Response) - Company sales (X), Independent (Predictor) - Advertising (Y)
	Independent (Predictor) - Advertising (X), Dependent (Response) - Company sales (Y)
	Dependent (Response) - Advertising (X), Independent (Predictor) - Company sales (Y)

Answer 1