Question

# 1. Management of a fast-food chain proposed the following regression model to predict sales at outlets:...

1.

Management of a fast-food chain proposed the following regression model to predict sales at outlets:

y = β0 + β1x1 + β2x2 + β3x3 + ε, where

y = sales (\$1000s)

x1= number of competitors within one mile

x2= population (in 1000s) within one mile

x3is 1 if a drive-up window is present, 0 otherwise

The following estimated regression equation was developed after 20 outlets were surveyed:

= 12.6 − 3.6x1+ 7.0x2+ 14.1x3

Use this equation to predict sales for a store with 4 competitors, a population of 4300 within one mile, and a drive-up window;
round your answer to two decimal places and omit the \$ symbol.

2.

You have run a simple regression on a sample with 21 observations, and obtained the following information:

SSR = 233
SST = 354

Calculate the value of the standard error of estimate, s

3.

For a data set with n = 26 observations and k = 6 independent variables, use F-table to find the critical value for a test of overall significance with α = 2.5%