SCENARIO 17-1
a Real Estate Builder Wishes to Determine How

question 5

Multiple Choice

SCENARIO 17-1
A real estate builder wishes to determine how house size (House) is influenced by family income
(Income) , family size (Size) , and education of the head of household (School) . House size is
measured in hundreds of square feet, income is measured in thousands of dollars, and education is in
years. The builder randomly selected 50 families and ran the multiple regression. Microsoft Excel
output is provided below: SUMMARY OUTPUT
Regression Statistics
$\begin{array} { l l } \text { Multiple R } & 0.865 \\ \text { R Square } & 0.748 \\ \text { Adjusted R Square } & 0.726 \\ \text { Standard Error } & 5.195 \\ \text { Observations } & 50 \end{array}$
ANOVA
$\begin{array} { l c c c c c } & d f & \text { SS } & \text { MS } & F & \text { Signif } F \\ \text { Regression } & & 3605.7736 & 1201.9245 & & 0.0000 \\ \text { Residual } & & 1214.2264 & 26.3962 & & \\ \text { Total } & 49 & 4820.0000 & & & \end{array}$

$\begin{array} { l c l c c } & \text { Coeff } & \text { StdError } & t \text { Stat } & P \text {-value } \\ \text { Intercept } & - 1.6335 & 5.8078 & - 0.281 & 0.7798 \\ \text { Income } & 0.4485 & 0.1137 & 3.9545 & 0.0003 \\ \text { Size } & 4.2615 & 0.8062 & 5.286 & 0.0001 \\ \text { School } & - 0.6517 & 0.4319 & - 1.509 & 0.1383 \end{array}$
-Referring to Scenario 17-1, which of the following values for the level of significance is the smallest for which at least two explanatory variables are significant individually?

• A) 0.01
• B) 0.025
• C) 0.05
• D) 0.15

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Definitions:

Optimum Level

The most favorable amount or degree of something for the most effective results.

Arousal

A physiological and psychological state of being awake, alert, and engaged; often associated with motivation, attention, and readiness for activity.

Novelty

The quality of being new, original, or unusual.

Uncertainty

The state of being unsure or having doubts about a situation or outcome, often leading to anxiety or indecision.