TABLE 14-5
a Microeconomist Wants to Determine How Corporate Sales

question 211

Multiple Choice

TABLE 14-5
A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by companies. She
proceeds to randomly select 26 large corporations and record information in millions of dollars. The Microsoft Excel output
below shows results of this multiple regression
$$\begin{array}{l}\text { Regression Statistics }\\\begin{array} { l r } \hline \text { Multiple R } & 0.830 \\\text { R Square } & 0.689 \\\text { Adjusted R Square } & 0.662 \\\text { Standard Error } & 17501.643 \\\text { Observations } & 26\end{array}\end{array}$$

ANOVA
$\begin{array}{lcrrrr}\hline & \text { d f }&\text { S S } & \text { M S } & \text { F }&\text { Significance F } \\\hline \text {Regression} & 2 & 15579777040 & 7789888520 & 25.432 & 0.0001 \\\text {Residual }& 23 & 7045072780 & 306307512 & & \\\text {Total }& 25 & 22624849820 & & & \\\hline\end{array}$

$$\begin{array} { l c c c c } & \text { Coefficients } & \text { Standard Error} & \text { t Stat } & \text { p-value } \\\text { Intercept } & 15800.0000 & 6038.2999 & 2.617 & 0.0154 \\\text { C apital } & 0.1245 & 0.2045 & 0.609 & 0.5485 \\\text { W ages } & 7.0762 & 1.4729 & 4.804 & 0.0001 \\\hline\end{array}$$

-Referring to Table 14-5, when the microeconomist used a simple linear regression model with sales as the dependent variable and wages as the independent variable, she obtained an r² value of 0.601. What additional percentage of the total variation of sales has been explained by including capital spending in the multiple regression?

• A) 22.9%
• B) 31.1%
• C) 60.1%
• D) 8.8%

---

Definitions:

Green Light

In general use, to give permission or approval to proceed with a project, idea, or situation.

General Adaptation

General adaptation refers to an organism's response to stressors in its environment in an attempt to restore homeostasis.

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period of no exposure to the conditioned stimulus.

Discrimination

The unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.