The Editors of a National Automotive Magazine Recently Studied 30

question 139

Multiple Choice

The editors of a national automotive magazine recently studied 30 different automobiles sold in the United States with the intent of seeing whether they could develop a multiple regression model to explain the variation in highway miles per gallon.A number of different independent variables were collected.The following regression output (with some values missing) was recently presented to the editors by the magazine's analysts: Based on this output and your understanding of multiple regression analysis,which of the following statements is true?

• A)The overall multiple regression model explains a significant portion of the variation in highway mileage when tested at a significance level of 0.05.
• B)Only the two independent variables are statistically significant in the presence of the others when a significance level of 0.05 is used to test.
• C)The standard error of the estimate is a negative value due to the multicollinearity problems in the model.
• D)None of the above is true.

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Definitions:

Production Possibility Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs and technology, illustrating the trade-offs and efficiency in production.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts and/or the tangible machinery and production equipment used in environments such as plants and factories.

Institutional Constraints

Regulations, norms, or laws imposed by institutions that limit or guide the behavior of individuals, groups, or firms within a society or economy.

Production Possibilities Curve

A graph that shows the various combinations of goods and services that an economy can produce given its resources and technology.