Instruction 13.32 One of the Most Common Questions of Prospective House Buyers

question 179

Multiple Choice

Instruction 13.32
One of the most common questions of prospective house buyers pertains to the average cost of heating in dollars (Y) .
To provide its customers with information on that matter, a large real estate firm used the following four variables to predict heating costs: the daily minimum outside temperature in degrees of Celsius (X₁) , the amount of insulation in cm (X₂) , the number of windows in the house (X₃) and the age of the furnace in years (X₄) . Given below are the Microsoft Excel outputs of two regression models.

-Referring to Instruction 13.32,what is your decision and conclusion for the test H₀: β₂ = 0 vs.H₁: β₂ < 0 at the α = 0.01 level of significance using Model 1?

• A) Reject H₀ and conclude that the amount of insulation does not have a linear effect on heating costs.
• B) Reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs.
• C) Do not reject H₀ and conclude that the amount of insulation has a linear effect on heating cots.
• D) Do not reject H₀ and conclude that the amount of insulation has a negative linear effect on heating costs.

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Definitions:

Personality Traits

Inherent characteristics or qualities that influence an individual's behavior, thinking, and emotions consistently over time.

Perceive

The act of becoming aware or conscious of something through the senses or cognitive processes.

Stressor

An event, situation, or stimulus that causes stress, triggering a physical or psychological response.

Type A Personality

A temperament characterized by high levels of competitiveness, self-imposed stress, impatience, and urgency.