THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 126

Essay

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
An actuary wanted to develop a model to predict how long individuals will live.After consulting a number of physicians,she collected the age at death (y),the average number of hours of exercise per week (x₁),the cholesterol level (x₂),and the number of points that the individual's blood pressure exceeded the recommended value (x₃).A random sample of 40 individuals was selected.The computer output of the multiple regression model is shown below.
THE REGRESSION EQUATION IS:
= 55.8 + 1.79x₁ - 0.021x₂ - 0.016x₃

S = 9.47 R-Sq = 22.5%
ANALYSIS OF VARIANCE

-Is there enough evidence at the 10% significance level to infer that the model is useful in predicting how long an individual will live?

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Definitions:

Floor Price

The minimum price set by regulation, often by the government, below which a commodity cannot legally be sold in the market.

Market Supply

The total amount of a specific good or service that is available to consumers in a market at a given time and price.

Equilibrium Price

Equilibrium price is the price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.

Consumer Surplus

The difference in the total expected payment consumers are ready to make for a good or service and their actual expenditures.