Exhibit 17

question 106

Essay

Exhibit 17.8.A realtor wants to predict and compare the prices of homes in three neighboring locations.She considers the following linear models:
Model A: Price = β₀ + β₁Size + β₂Age + ε,
Model B: Price = β₀ + β₁Size + β₂Loc1 + β₃Loc2 + ε,
Model C: Price = β₀ + β₁Size + β₂Age + β₃Loc1 + β₄Loc2 + ε,
where,
Price = the price of a home (in $thousands),
Size = the square footage (in square feet),
Loc1 = a dummy variable taking on 1 for Location 1,and 0 otherwise,
Loc2 = a dummy variable taking on 1 for Location 2,and 0 otherwise.
After collecting data on 52 sales and applying regression,her findings were summarized in the following table. Note: The values of relevant test statistics are shown in parentheses below the estimated coefficients.
Refer to Exhibit 17.8.Using Model B,what is the value of the test statistic for testing the joint significance of the variable Time and the interaction variable Time × Prime?

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Definitions:

1960s

A decade marked by significant cultural, political, and social changes worldwide, occurring from 1960 to 1969.

Compulsory Retirement

The mandatory retirement of an employee once they reach a certain age, as dictated by company policy or national law.

National Labor Relations Act

A foundational statute in United States labor law that protects the rights of employees to organize and bargain collectively with their employers.

Significant Piece

An important or notable part of something, often referring to a key element that has a major impact or role.