Exhibit 17

question 35

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 C,what is the conclusion for testing the joint significance of the two dummy variables at the 1% significance level?

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Definitions:

Traditional Sweatshops

Work environments characterized by low wages, long hours, and poor working conditions, typically in the manufacturing sector.

Family-Related Challenges

Difficulties and obstacles that arise within the family structure, impacting relationships, financial stability, and the health and well-being of its members.

Military Members

Individuals who serve in the armed forces, undertaking roles and duties to protect and serve their country, often demonstrating commitment and discipline.

Power Elite

A concept referring to a small group of powerful individuals who hold a disproportionate amount of wealth, privilege, political power, and control over societal institutions.