You are on page 1of 6

1.

Choose the expression that represents the Population Model


A.

= b0 + b1X1i + b2X2i + b3X3i

B. i = b0 + b1X1i + b2X2i + b3X3i + i


C. yi = 0 + 1Xi + 2X2i + 3X3i + i
D. E(Y|X) = 0 + 1X1 + 2X2 + 3X3 +
E. E(Y|X) = 0 + 1X1 + 2X2 + 3X3

2. Choose the expression that represents the Estimated Regression Equation


A.

= b0 + b1X1i + b2X2i + b3X3i

B. i = b0 + b1X1i + b2X2i + b3X3i + i


C. yi = 0 + 1Xi + 2X2i + 3X3i + i
D. E(Y|X) = 0 + 1X1 + 2X2 + 3X3 +
E. E(Y|X) = 0 + 1X1 + 2X2 + 3X3

3. Choose the expression that represents the Regression Equation


A.

= b0 + b1X1i + b2X2i + b3X3i

B. i = b0 + b1X1i + b2X2i + b3X3i + i


C. yi = 0 + 1Xi + 2X2i + 3X3i + i
D. E(Y|X) = 0 + 1X1 + 2X2 + 3X3 +
E. E(Y|X) = 0 + 1X1 + 2X2 + 3X3

4. When relevant independent variables are added to the model, the adjusted R^2
A. usually rises
B. usually falls
C. must fall
D. must rise
E. stays the same
5. When irrelevant independent variables are added to the model, the R^2
A. usually rise
B. usually falls
C. must fall
D. must rise
E. stays the same
6. If a researcher would like to model for a curvilinear relationship, they should add
A. a quadratic term
B. an interaction term
C. a dummy variable
D. a lag dependent variables
7. If a researcher would like to add qualitative data as regressors, they should add
A. a quadratic term
B. an interaction term
C. a dummy variable
D. a lag dependent variable

8. If a researcher would like to test whether the effect of an independent variable on the
dependent variable depends on the value of another regressor, they should add

A. a quadratic term
B. an interaction term
C. a dummy variable
D. a lag dependent variable
Use this expression for 9 through 12
i

= 16.7 + 2.344x1 + 6.531x2 0.354x3 + 1.865x4

9. Interpret b1
A. The expected value of y rises by 2.344 units when x 1 rises by 1, holding x2, x3 & x4 constant.
B. The predicted value of y rises by 2.344 units when x 1 rises by 1, holding x2, x3 & x4 constant.
C. The predicted value of y is 16.7 units when x 1 = x2 = x3 = x4 = 0
D. The expected value of y is 16.7 units when x 1 = x2 = x3 = x4 = 0
10. How does multiple regression find b 1?
A. Regress x1 on all other regressors. Regress y on the residuals from that model
B. Regress y on all other regressors. Regress x 1 on the residuals from that model
C. Regress x2 on all other regressors. Regress y on the residuals from that model
D. Regress y on all other regressors. Regress x 2 on the residuals from that model.
11. If x1 and x2 are highly correlated, the model has
A. serial correlation
B. herteroskedasticity
C. multicollinearity
D. autocorrelation
12. If x1 and x2 are highly correlated, then x1 can appear
A. insignificant when it is actually significant
B. significant when it is actually insignificant
C. non-linear when it is actually linear
D. linear when it is actually non-linear
Use these expression for problems 33 through 35.

yi = 0 + 1Xi +
I

= p i-1 + zi

13. The model has positive autocorrelation if


A. p is positive
B. zi is positive
C. i is positive
D. i-1 is positive
14. Choose the correct null hypothesis for the Durbin Watson test:
A. Ho : zi = 0
B. Ho : p = 0
C. Ho : 1 = 0
D. Ho: I = 0

15. If dL = 1.35 and dU = 1.55, then a Durbin Watson test statistic of 2.75 indicates
A. there is negative autocorrelation
B. inconclusive for positive autocorrelation
C. inconclusive for negative autocorrelation

D. there is no autocorrelation
E. there is positive autocorrelation
Use the following scenario for problem
A researcher at Burger King wants to know if customers spend different amounts
depending on their form of payment, holding the customers income levels constant.
Method of payment could be Check, Cash, Debit Card or Credit Card. The following
model was estimated.
OrderPricei = 0 + 1Income + 2Cash + 3CreditCard + 3DebitCard +

16. Choose the correct way to record a consumer who paid with a Debit Card
CASH
CREDIT CARD
DEBIT CARD
A.
0
0
0
B.
1
0
0
C.
0
1
0
D.
0
0
1
17. Choose the correct way to record a consumer who paid with a Check.
CASH
CREDIT CARD
DEBIT CARD
A.
0
0
0
B.
1
0
0
C.
0
1
0
D.
0
0
1
18. Interpret 2
A. 2 is the difference in the expected order price between customers using Cash versus
customers using a Debit Card, holding the customers income constant.
B. 2 is the change in the expected order price when Cash increases by 1 unit, holding customers
income constant
C. 2 is the difference in the expected order price between customers using Cash versus
customers using Credit Cards, holding the customers income constant
D. 2 is the difference in the expected order price between customers using Cash versus
customers using a Check, holding the customers income constant.

This model seeks to explain variation in residential home prices. The dependent
variable is the homes sales price. SQFT is the square feet of the house. Age is the

age of the house. Houses were located in either City school districts, County school
districts or Suburban school districts, where city school districts is the omitted
category.
19. Choose the correct estimated regression equation.
A. salespricei = 36,499.15 + 391.40AGE + 91.162SQFT + 63,858.587COUNTYSCHOOL
+ 46,869.43SUBURBAN SCHOOL
B. salespricei =391.40AGE + 4.998AGE^2 + 91.162SQFT 0.702AGExSQFT +
63,858.587COUNTYSCHOOL
+ 46,869.43SUBURBANSCHOOL
C. salespricei = 36,499.15 + 391.40AGE + 4.998AGE^2 + 91.162SQFT -0.702AGExSQFT
+ 63,858.587COUNTYSCHOOL + 46,869.43SUBURBANSCHOOL + i
D. salespricei = 36,499.15 + 391.40AGE + 4.998AGE^2 + 91.162SQFT 0.702AGExSQFT
+ 63,858.587COUNTYSCHOOL + 46,869.43SUBURBANSCHOOL
20. Predict the sales price for a 10-year-old house with 2,000 square feet in the city school
district. (Round to the nearest thousand)
A. $256,000
B. $223,000
C. $320,000
D. $209,000
E. $273,000
21. What is the estimated effect of increasing the square feet of a house by 100 feet on the sales
price, given the house is 10 years old and has 2,000 square feet?
A. Predicted price falls by $1,312.84
B. Predicted price rises by $910.92
C. Predicted price rises by $91.16
D. Predicted price rises by $90.46
E. Predicted price rises by $84.14

22. What is the estimated effect of increasing the square feet of a house by 1 foot on the sales
price, given the house is 10 years old and has 2,000 square feet?
A. Predicted price falls by $1,312,840
B. Predicted price rises by $910,920
C. Predicted price rises by $9,116
D. Predicted price rises by $9,046
E. Predicted price rises by $8,414
23. What is the estimated effect of a house aging 1 year on the sale price, given the house is 10
years old and has 2,000 square feet?
A. Predicted price rises by $440.68
B. Predicted price rises by $395.70
C. Predicted price falls by $1,002.60
D. Predicted price falls by $962.62
E. Predicted price falls by $912.64
24. Choose the correct null hypothesis for testing the entire model for significance
A. Ho : 1 = 2 = 3 = 4 = 5 = 6 = 0

B. Ho : x1 = x2 = x3 = x4 = x5 = x6 = 0
C. Ho : 0 = 1 = 2 = 3 = 4 = 5 = 6 = 0
D. Ho: at least one Ho : 0 = 0
25. When testing the entire model for significance, what is the test statistic
A. 4.12
B. 1.93
C. 18.2
D. 15.07
E. 1.57
26. When testing the entire model for significance, what is the critical value with a = 0.05?
A. 2.40
B. 2.31
C. 2.33
D.2.42
27. When testing the entire model for significance with a = 0.05, what is your conclusion?
A. Reject Ho, so the model is insignificant
B. Do not reject Ho , so the model is insignificant
C. Reject Ho, so the model is significant
D. Do not reject Ho, so the model is significant
28. Choose the correct null hypothesis for testing the individual regressor AGE^2 for significant
A. Ho : 0 = 1 = 2 = 3 = 4 = 5 = 6 = 0
B. Ho : 1 = 0
C. Ho : 2 = 0
D. Ho : 1 = 0
29. When testing the individual regressor AGE^2 for significance, what is the test statistic?
A. 4.998
B. 0.37
C. 1.2
D. 0.82
30. When testing the individual regressor AGE^2 for significance with a = 0.05 what is your
conclusion?
A. Because the test statistic is inside of the critical value, do not reject Ho, so AGE^2 is
insignificant.
B. Because the test statistic is outside of the critical value, do not reject Ho, so AGE^2 is
significant
C. Because the test statistic is outside of the critical value, reject Ho, so AGE^2 is significant
D. Because the test statistic is inside of the critical value, reject Ho, so AGE^2 is insignificant
31. The individual regressor AGExSQFT is
A. insignificant with a = 0.05 and significant with a = 0.01
B. significant with a = 0.05 and insignificant with a = 0.01
C. insignificant with both a = 0.05 and a = 0.01
D. significant with both a = 0.05 and a = 0.01
32. With a = 0.05, the individual regressor County School is
A. insignificant because the confidence interval does not include 0
B. insignificant because the confidence interval includes 0
C. significant because the confidence interval does not include 0
D. significant because the confidence interval includes 0

33. Rank the school districts from highest to lowest based on the predicted house sale price.
A. City, Suburban, County
B. County, Suburban, City
C. Suburban, County, City
D. City, County, Suburban
34. Calculate and interpret Radj^2
A. 8.2% of the variation in y is explained by the model, adjusted for the # of regressors
B. 22.7% of the variation in y is explained by the model, adjusted for the # of regressors
C. 77.3% of the variation in y is explained by the model, adjusted for the # of regressors
D. 73.0% of the variation in y is explained by the model, adjusted for the # of regressors
1. C
2. A
3. E
4. A
5. D
6. A
7. C
8. B
9. B
10. A
11. C
12. A
13. A
14. B
15. A?
16. D
17. A

18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.

D
D
D
E
E
E
A
C
A
C
C
C
A
B
C
B
D

You might also like