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MSci609_Quiz_6 - y increases as annual income x increases b...

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Department of Management Sciences Faculty of Engineering University of Waterloo MSci 609 Quantitative data Analysis for Management Sciences QUIZ 6 NAME: ID: Problem A consumer investigator obtained the following least squares straight line model (based on a sample of n=100 families) relating the yearly food cost y for a family of 4 to annual income x : x y 26 . 0 467 ˆ + = . In addition, the investigator computed the quantities s = 1.1, SS xx = 26. a) Compute the observed p -value for a test that determines whether mean yearly food cost
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Unformatted text preview: y increases as annual income x increases. b) We would like to conclude that the mean yearly food cost increases as annual income increase. What would be the smallest value of significance level α that needs to be used in this case? c) Comment on the value of α in part (b). Solution : The consumer investigator wants to test: b) What is the smallest α level that would reject the null hypothesis and make the regression model adequate....
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