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SCENARIO 18-2
One of the Most Common Questions of Prospective β\beta

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SCENARIO 18-2
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 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X1 ) , the amount of insulation in inches ( X 2 ) , the number of windows in the house ( X3 ) , and the age of the furnace in years ( X 4 ) . Given below are the EXCEL outputs of two regression models.
SCENARIO 18-2 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 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X<sub>1</sub> ) , the amount of insulation in inches ( X <sub>2</sub> ) , the number of windows in the house ( X<sub>3</sub> ) , and the age of the furnace in years ( X <sub>4</sub> ) . Given below are the EXCEL outputs of two regression models. -Referring to Scenario 18-2 and allowing for a 1% probability of committing a type I error,what is the decision and conclusion for the test H<sub>0 </sub>: \beta <sub>1 </sub>= \beta <sub>2 </sub>= \beta <sub>3 </sub>= \beta <sub>4 </sub>= 0 vs.H<sub>1 </sub>: At least one \beta <sub>j </sub> \neq 0, j = 1,2,...,4 using Model 1? A) Do not reject H<sub>0</sub> and conclude that the 4 independent variables have significant individual linear effects on heating costs. B) Reject H<sub>0</sub> and conclude that the 4 independent variables taken as a group have significant linear effects on heating costs. C) Do not reject H<sub>0</sub> and conclude that the 4 independent variables taken as a group do not have significant linear effects on heating costs. D) Reject H<sub>0</sub> and conclude that the 4 independent variables taken as a group do not have significant linear effects on heating costs.
SCENARIO 18-2 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 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X<sub>1</sub> ) , the amount of insulation in inches ( X <sub>2</sub> ) , the number of windows in the house ( X<sub>3</sub> ) , and the age of the furnace in years ( X <sub>4</sub> ) . Given below are the EXCEL outputs of two regression models. -Referring to Scenario 18-2 and allowing for a 1% probability of committing a type I error,what is the decision and conclusion for the test H<sub>0 </sub>: \beta <sub>1 </sub>= \beta <sub>2 </sub>= \beta <sub>3 </sub>= \beta <sub>4 </sub>= 0 vs.H<sub>1 </sub>: At least one \beta <sub>j </sub> \neq 0, j = 1,2,...,4 using Model 1? A) Do not reject H<sub>0</sub> and conclude that the 4 independent variables have significant individual linear effects on heating costs. B) Reject H<sub>0</sub> and conclude that the 4 independent variables taken as a group have significant linear effects on heating costs. C) Do not reject H<sub>0</sub> and conclude that the 4 independent variables taken as a group do not have significant linear effects on heating costs. D) Reject H<sub>0</sub> and conclude that the 4 independent variables taken as a group do not have significant linear effects on heating costs.
-Referring to Scenario 18-2 and allowing for a 1% probability of committing a type I error,what is the decision and conclusion for the test H0 : β\beta 1 = β\beta 2 = β\beta 3 = β\beta 4 = 0 vs.H1 : At least one β\beta j ≠\neq 0, j = 1,2,...,4 using Model 1?

Definitions:

Act of State Doctrine

A principle in international law that exempts a nation from being sued in another nation's courts for acts performed by it in the exercise of its sovereign authority.

Sovereign Immunity

The legal doctrine that a sovereign or state cannot commit a legal wrong and is immune from civil suit or criminal prosecution.

Agricultural Cooperatives Exemption

A legal provision that allows agricultural cooperatives to operate under specific regulatory exceptions, often for tax purposes.

Capper-Volstead Act

A U.S. federal law that grants farmers the ability to create agricultural cooperatives without risking antitrust law sanctions.

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