# Regression Analysis

1. A car maker developed a new engine and wants to recommend the grade of gasoline to use. The four grades are: below regular, regular, premium and super premium. The test car made 3 trial runs on the track using each grade. Assuming any grade can be used at 0.05 level, what is the critical value of F for the acceptance/rejection of the null hypothesis?

Trail # Below Reg. Regular Premium Super Premium

-------- ------------- --------- ----------- -----------------

1 39.31 36.69 38.99 40.04

2 39.87 40.00 40.02 39.89

3 39.87 41.01 39.99 39.93

A. 1.96

B. 2.33

C. 4.07

D. 12.00

E. none of the above

2. A regression analysis btwn. sales {in $1000} and price {in dollars} resulted in the following equation:

Y= 50,000 - 8X

The above equation implies than an:

A. increase in $1 in price is associated w/ a decrease of $8 in sales

B. increase in $8 in price is associated w/ an increase of $8,000 in sales

C. increase of $1 in price is associated w/ decrease of $42,000 in sales

D. increase in $1 in price is associated w/ decrease of $8,000 in sales

E. none of above

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#### Solution Summary

Answers of multiple choice questions from regression analysis