Question: The following is the result of a multiple regression analysis to predict costs from Circ, Income, and Male.

The prediction equation is:

Costs = -8642.5352

+ 5.281485 Circ

+ 1.222643 Income

- 10.997406 Male

0.69422 R Squared

13129.253 Standard Error of Estimate

48 Number of Observations

33.29751 F Statistic

2.162E-11 p value

The above is a regression analysis on data concerning advertising costs in 48 magazines. The variables are:

Costs Cost of a full page color ad

Circ Magazine circulation in thousands

Income Median income of the subscribers

Male Percentage of subscribers who are male

1. Which of the three x-variables is the most important predictor in the model? Why was this chosen over the other two x-variables?
2. According to the given output, what would be the eventual effect of a 1000 person increase in circulation. Give an interval estimate.
3. What cost does the model predict for an ad in the magazine, which has a circulation of 1 million and an audience that is 58% male with a median income of $32,000/year? Give an interval estimate if possible. Simply set up the calculations.
4. Regardless of the answer in #3, suppose the calculation yields an estimated cost of $34,132. You find out the actual cost of an ad in the magazine is $49,000. Do you agree that this does not look like an accurate prediction? Cite specific numerical evidence to support the answer.

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document