A Collector of Grandfather Clocks Believes That the Price Received $y$

question 51

Multiple Choice

A collector of grandfather clocks believes that the price received for the clocks at an auction increases with the number of bidders, but at an increasing (rather than a constant) rate. Thus, the model proposed to best explain auction price ( $y$ , in dollars) by number of bidders $( x )$ is the quadratic model
$$E ( y ) = \beta _ { 0 } + \beta _ { 1 } x + \beta _ { 2 } x ^ { 2 }$$
This model was fit to data collected for a sample of 32 clocks sold at auction; a portion of the printout follows:
$\begin{array}{lrrrr}\hline & \text { PARAMETER } & \text { STANDARD } & \text { T FOR 0: } & \\\text { VARIABLES } & \text { ESTIMATE } & \text { ERROR } & \text { PARAMETER }=0 & \text { PROB > |T| } \\& & & & \\\text { INTERCEPT } & 286.42 & 9.66 & 29.64 & .0001 \\\mathrm{X} & .31 & .06 & 5.14 & .0016 \\\mathrm{X} \cdot \mathrm{X} & -.000067 & .00007 & -0.95 & .3600 \\\hline\end{array}$

Give the $p$ -value for testing $H _ { 0 } : \beta _ { 2 } = 0$ against $H _ { \mathrm { a } } : \beta _ { 2 } \neq 0$ .

• A) .18
• B) .05
• C) .36
• D) .0016

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