The Following Is Part of the Results of a Regression

question 129

Essay

The following is part of the results of a regression analysis involving sales Y in millions of dollars), advertising expenditures X1 in thousands of dollars), and number of salespeople X2) for a corporation. The regression was performed on a sample of 10 observations.
$\begin{array}{lr}&\text { Coefilicient }&\text { Standard Error }\\\text { Intercept } & 40.00 & 7.00 \\X_{1} & 8.00 & 2.50 \\X_{2} & 6.00 & 3.00\end{array}$
a. If the company uses $40,000 in advertisement and has 30 salespersons, what are the expected sales? Give your answer in dollars.
b. At α = 0.05, test for the significance of the coefficient of advertising.
c. At α = 0.05, test for the significance of the coefficient of the number of salespeople.

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Definitions:

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a product for which each unit is identical to every other unit.

Coconuts

Tropical fruits or nuts known for their water, milk, oil, and meat, and often used as examples in economic models.

Fish

Aquatic vertebrates that are typically covered with scales and equipped with fins for swimming.

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