TABLE 15-6 Given Below Are Results from the Regression Analysis on 40

question 83

True/False

TABLE 15-6
Given below are results from the regression analysis on 40 observations where the dependent variable is the number of weeks a worker is unemployed due to a layoff (Y) and the independent variables are the age of the worker (X₁), the number of years of education received (X₂), the number of years at the previous job (X₃), a dummy variable for marital status (X₄: 1 = married, 0 = otherwise), a dummy variable for head of household (X₅: 1 = yes, 0 = no) and a dummy variable for management position (X₆: 1 = yes, 0 = no).
The coefficient of multiple determination (R) for the regression model using each of the 6 variables Xⱼ as the dependent variable and all other X variables as independent variables are, respectively, 0.2628, 0.1240, 0.2404, 0.3510, 0.3342 and 0.0993.
The partial results from best-subset regression are given below:

-Referring to Table 15-6, the model that includes X₁, X₂, X₃, X₅ and X₆ should be selected using the adjusted r² statistic.

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Definitions:

Marginal Utility

The incremental utility or happiness a consumer derives from acquiring and using an additional unit of a good or service.

Utility Per Dollar

A measure of the satisfaction or usefulness obtained from purchasing goods or services relative to the amount of money spent.

Diminishing Marginal Utility

The principle stating that as more of a good or service is consumed, the marginal benefit of additional units will decline.

Utility Maximization

The process by which consumers adjust their consumption to achieve the highest level of satisfaction from their available resources.