SCENARIO 14-6 One of the Most Common Questions of Prospective House Buyers

question 161

Multiple Choice

SCENARIO 14-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) . To provide its customers with information on that matter, a large real estate firm used the following 2 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X₁ ) and the amount of insulation in inches ( X ₂ ) . Given below is EXCEL output of the regression model.



Also SSR (X₁ | X₂) = 8343.3572 and SSR (X₂ | X₁) = 4199.2672
-Referring to Scenario 14-5,at the 0.01 level of significance,what conclusion should the microeconomist reach regarding the inclusion of Capital in the regression model?

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

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Definitions:

Administered Vertical Marketing System

A coordinated marketing system where a single entity of a distribution channel takes the lead in organizing the flow of products or services, without formal agreements or ownership.

Contractual Agreement

A legally binding contract between two or more parties outlining their responsibilities and obligations.

Intensive

Characterized by or requiring significant effort or energy, often in reference to growth strategies or distribution methods.