At the 0.05 level of significance, is there evidence that the interaction term m
ID: 3231974 • Letter: A
Question
At the 0.05 level of significance, is there evidence that the interaction term makes a significant contribution to the model?
What is the p-value for this test?
round to 3 decimals
Which regression model is more appropriate, the model with the interaction term used in (a) or the original model?
A.The new model is more appropriate because the interaction issignificant.Your answer is not correct.
B.The old model is more appropriate because the interaction is significant.
C.The old model is more appropriate because the interaction is not significant.This is the correct answer.
D.The new model is more appropriate because the interaction is not significant.
E.The new model is more appropriate because the coefficient of the interaction term is not equal to 0.
Cost Sales Orders
63.28 897 5927
71.42 451 4982
82.05 508 5311
64.72 399 4271
66.39 457 4089
83.69 516 5230
57.43 354 2927
77.73 496 4587
61.17 439 3451
87.91 548 3750
Explanation / Answer
The statsitcal software output for the new model is:
Multiple linear regression results:
Dependent Variable: Cost
Independent Variable(s): Sales, Orders, Sales * Orders
Cost = -117.26577 + 0.38659955 Sales + 0.035557108 Orders + -0.000070592262 Sales * Orders
Parameter estimates:
Analysis of variance table for multiple regression model:
Summary of fit:
Root MSE: 6.5512249
R-squared: 0.7456
R-squared (adjusted): 0.6184
Hence,
p - value = 0.032
The new model is more appropriate because the interaction is significant.
Option A is correct.
Parameter Estimate Std. Err. Alternative DF T-Stat P-value Intercept -117.26577 47.284792 0 6 -2.4799892 0.0478 Sales 0.38659955 0.1108148 0 6 3.4886996 0.013 Orders 0.035557108 0.0085562341 0 6 4.155696 0.006 Sales * Orders -0.000070592262 0.000018943726 0 6 -3.726419 0.0098Related Questions
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