# Regression Analysis

A large consumer product company wants to measure the effectiveness of different types of advertising media in the promotion of its products. Specifically, two types of advertising media are to be considered: radio/TV advertising and newspaper advertising (including the cost of discount coupons). The sales of product (in thousands of dollars) and also the levels of media expenditure (in thousands of dollars) during the test month (Sales in thousands of dollars, radio/TV ads in thousands of dollars and newspaper ads in thousands of dollars for 22 cities). Let X1 and X2 be the dollar amount of radio/TV ads and newspaper ads, respectively. Using EXCEL, answer the following:

Sales RadioTV Newspaper

973 0 40

1119 0 40

875 25 25

625 25 25

910 30 30

971 30 30

931 35 35

1177 35 35

882 40 25

982 40 25

1628 45 45

1577 45 45

1044 50 0

914 50 0

1329 55 25

1330 55 25

1405 60 30

1436 60 30

1521 65 35

1741 65 35

1866 70 40

1717 70 40

1. What is the intercept (regression coefficient) b0?

a) 13.080

b) 16.795

c) 156.430

2. What is the slope b1 for X1?

a) 13.080

b) 16.795

c) 156.430

3. What is the slope b2 for X2?

a) 13.080

b) 16.795

c) 156.430

4. Determine which explanatory variable has a significant relationship with sales (Y) using the 5% significance level.

a) Radio/TV only

b) Newspaper only

c) Both Radio/TV and Newspaper

5. Set up a 95% confidence interval estimate of the population slope between sales and radio/TV ads.

a) (9.399, 16.763)

b) (10.593, 22.998)

c) (6.320, 18.005)

6. Set up a 95% confidence interval estimate for the average sales that have 10 radio/TV ads and 20 newspaper ads.

a) (464.393, 781.893)

b) (254.608, 991.678)

c) (158.750, 464.393)

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