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Statistics for Management and Economics
Exam 18: Model Building
Path 4
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Question 21
True/False
Regression analysis allows the statistics practitioner to use mathematical models to realistically describe relationships between the dependent variable and independent variables.
Question 22
Multiple Choice
For the following regression equation
,which combination of x
1
and x
2
,respectively,results in the largest average value of y?
Question 23
True/False
In stepwise regression,the independent variable with the largest F-statistic,or equally the smallest p-value,is chosen as the first entering variable.
Question 24
True/False
In the first-order model
,a unit increase in x
2
,while holding x
1
constant at 1,changes the value of y on average by −5 units.
Question 25
Short Answer
In multiple regression,which procedure permits variables to enter and leave the model at different stages of its development?
Question 26
Essay
Motorcycle Fatalities A traffic consultant has analyzed the factors that affect the number of motorcycle fatalities.She has come to the conclusion that two important variables are the number of motorcycle and the number of cars.She proposed the model
(the second-order model with interaction),where y = number of annual fatalities per county,x
1
= number of motorcycles registered in the county (in 10,000),and x
2
= number of cars registered in the county (in 1000).The computer output (based on a random sample of 35 counties)is shown below: THE REGRESSION EQUATION IS
S = 15.2 R−Sq = 47.2% ANALYSIS OF VARIANCE
-{Motorcycle Fatalities Narrative} What does the coefficient of
tell you about the model?
Question 27
Multiple Choice
The model y = β
0
+ β
1
x
1
+ β
2
x
2
+ ε is referred to as a:
Question 28
Short Answer
Senior Medical Students A professor of Anatomy wanted to develop a multiple regression model to predict the students' grades in her fourth-year medical course.She decides that the two most important factors are the student's grade point average in the first three years and the student's major.She proposes the model y = β
0
+ β
1
x
1
+ β
2
x
2
+ β
3
x
3
+ ε,where y = Fourth-year medical course final score (out of 100),x
1
= G.P.A.in first three years (range from 0 to 12),x
2
= 1 if student's major is medicine and 0 if not,and x
3
= 1 if student's major is biology and 0 if not.The computer output is shown below. THE REGRESSION EQUATION IS y = 9.14 + 6.73x
1
+ 10.42x
2
+ 5.16x
3
S = 15.0 R−Sq = 44.2% ANALYSIS OF VARIANCE
-{Senior Medical Students Narrative} Predict the final grade (out of 100)in the fourth-year medical course for a biology major student who has a 10.95 G.P.A.in their first three years (range from 0 to 12).
Question 29
Multiple Choice
When we plot x versus y,the graph of the model y = β
0
+ β
1
x + β
2
x
2
+ ε is shaped like a:
Question 30
Multiple Choice
In stepwise regression procedure,the independent variable with the largest F-statistic,or equally with the smallest p-value,is chosen as the first entering variable.The standard,also called the F-to-enter,is usually set at F equals:
Question 31
Essay
Motorcycle Fatalities A traffic consultant has analyzed the factors that affect the number of motorcycle fatalities.She has come to the conclusion that two important variables are the number of motorcycle and the number of cars.She proposed the model
(the second-order model with interaction),where y = number of annual fatalities per county,x
1
= number of motorcycles registered in the county (in 10,000),and x
2
= number of cars registered in the county (in 1000).The computer output (based on a random sample of 35 counties)is shown below: THE REGRESSION EQUATION IS
S = 15.2 R−Sq = 47.2% ANALYSIS OF VARIANCE
-{Motorcycle Fatalities Narrative} Test at the 1% significance level to determine if the
term should be retained in the model.
Question 32
True/False
The model y = β
0
+ β
1
x
1
+ β
2
x
2
+ β
3
x
1
x
2
+ ε is referred to as a second-order model with two predictor variables with interaction.
Question 33
Essay
Silver Prices An economist is in the process of developing a model to predict the price of silver.She believes that the two most important variables are the price of a barrel of oil (x
1
)and the interest rate (x
2
).She proposes the first-order model with interaction: y = β
0
+ β
1
x
1
+ β
2
x
2
+ β
3
x
1
x
3
+ ε.A random sample of 20 daily observations was taken.The computer output is shown below. THE REGRESSION EQUATION IS y = 115.6 + 22.3x
1
+ 14.7x
2
− 1.36x
1
x
2
S = 20.9 R−Sq = 55.4% ANALYSIS OF VARIANCE
-{Silver Prices Narrative} Interpret the coefficient b
1
.
Question 34
Multiple Choice
In explaining the amount of money spent on children's shoes each month,which of the following independent variables is best represented with an indicator variable?
Question 35
True/False
Dummy variables are variables that can take on only two values (namely,0 or 1)and that are used to indicate the absence or presence of a particular nominal characteristic.
Question 36
Short Answer
The model y = β
0
+ β
1
x
1
+ β
2
x
2
+ β
3
x
1
x
2
+ ε is a(n)____________________-order polynomial model with ____________________ predictor variables and ____________________.