TABLE 13-5
A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by companies. She proceeds to randomly select 26 large corporations and record information in millions of dollars. The Microsoft Excel output below shows results of this multiple regression.

-Referring to Table 13-5, what are the predicted sales (in millions of dollars)for a company spending $100 million on capital and $100 million on wages?
A) 15,800.00
B) 16,520.07
C) 17,277.49
D) 20,455.98

Question

TABLE 13-5
A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by companies. She proceeds to randomly select 26 large corporations and record information in millions of dollars. The Microsoft Excel output below shows results of this multiple regression.
 
-Referring to Table 13-5, what are the predicted sales (in millions of dollars)for a company spending $100 million on capital and $100 million on wages?
A) 15,800.00 
B) 16,520.07 
C) 17,277.49 
D) 20,455.98

Quizplus · Accepted Answer

Looking at the coefficients in the table, the intercept is 12,153.34, the coefficient on capital spending is 57.86, and the coefficient on wage spending is 98.22. Plug in the values for capital and wage spending to get:

predicted sales = 12153.34 + 57.86(100) + 98.22(100) = 16,520.07

Therefore, the predicted sales is $16,520.07 million.

TABLE 13-5 A Microeconomist Wants to Determine How Corporate Sales Are Influenced