Exhibit 15-2
A regression model between sales (y in $1,000), unit price (x 1 in dollars) and television advertisement (x 2 in dollars) resulted in the following function: = 7 - 3x 1 + 5x 2
For this model SSR = 3500, SSE = 1500, and the sample size is 18.
-Refer to Exhibit 15-2. If SSR = 600 and SSE = 300, the test statistic F is
A)2.33
B)0.70
C)17.5
D)1.75

Question

Exhibit 15-2
A regression model between sales (y in $1,000), unit price (x 1 in dollars) and television advertisement (x 2 in dollars) resulted in the following function:  = 7 - 3x 1 + 5x 2 
For this model SSR = 3500, SSE = 1500, and the sample size is 18.
-Refer to Exhibit 15-2. If SSR = 600 and SSE = 300, the test statistic F is
A)2.33 
B)0.70 
C)17.5 
D)1.75

Quizplus · Accepted Answer

The formula for F-test is F = MSR/MSE where MSR is the explained variation and MSE is the unexplained variation. Using the given values of SSR and SSE, we can calculate MSR = SSR/1 = 600 and MSE = SSE/(n-2) = 300/(18-2) = 18.75. Substituting into the formula gives F = 600/18.75 = 32. Therefore, the test statistic F is 32, which is greater than the critical F-value at the 0.01 level of significance. The best choice is C.

Exhibit 15-2 A Regression Model Between Sales (Y in $1,000), Unit Price