Exhibit 13-2
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 13-2. The multiple coefficient of determination for this problem is
A)0.4368
B)0.6960
C)0.3040
D)0.2289

Question

Exhibit 13-2
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 13-2. The multiple coefficient of determination for this problem is
A)0.4368 
B)0.6960 
C)0.3040 
D)0.2289

Quizplus · Accepted Answer

The total sum of squares (SST) can be calculated as SST = SSR + SSE, where SST represents the total variation in the dependent variable (sales). Thus, SST = 5000 (since SSR = 3500 and SSE = 1500).

The multiple coefficient of determination (R-squared) is the proportion of total variance explained by the independent variables in the regression model. It can be calculated as R-squared = SSR/SST.

Therefore, R-squared = 3500/5000 = 0.7 or 70%.

The closest option is B, which is 0.6960 (rounded to four decimal places).

Exhibit 13-2 A Regression Model Between Sales (Y in $1,000), Unit Price