TABLE 14-4 A Real Estate Builder Wishes to Determine How House Size

question 82

Multiple Choice

TABLE 14-4
A real estate builder wishes to determine how house size (House) is influenced by family income (Income) and family size (Size) .House size is measured in hundreds of square feet and income is measured in thousands of dollars.The builder randomly selected 50 families and ran the multiple regression.Partial Microsoft Excel output is provided below: Also SSR (X₁ ∣ X₂) = 36400.6326 and SSR (X₂ ∣ X₁) = 3297.7917
-Referring to Table 14-4,at the 0.01 level of significance,what conclusion should the builder draw regarding the inclusion of Size in the regression model?

• A)Size is significant in explaining house size and should be included in the model because its p-value is less than 0.01.
• B)Size is significant in explaining house size and should be included in the model because its p-value is more than 0.01.
• C)Size is not significant in explaining house size and should not be included in the model because its p-value is less than 0.01.
• D)Size is not significant in explaining house size and should not be included in the model because its p-value is more than 0.01.

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Definitions:

Market Price

The price at which a good or service is offered for sale in the open market.

Market Price

The market price at which you can currently buy or sell a service or asset in a specified market.

Negative Economic Profit

A situation where a firm's total revenue is less than its total costs, including opportunity costs.

Market Price

The current value at which an asset or service can be bought or sold in a competitive marketplace.