College Textbooks A publisher ofcollege textbooks

Chapter 13, Problem 10

(choose chapter or problem)

College Textbooks A publisher ofcollege textbooks conducted a study to relateprofit per text y to cost of sales x over a 6-year periodwhen its sales force (and sales costs) were growingrapidly. These inflation-adjusted data (in thousands ofdollars) were collected:Profit per Text, y 16.5 22.4 24.9 28.8 31.5 35.8Sales Costper Text, x 5.0 5.6 6.1 6.8 7.4 8.6Expecting profit per book to rise and then plateau, thepublisher fitted the model E(y) b0 b1x b2x 2 tothe data SUMMARY OUTPUTRegression Statistics0.99780.99550.99250.59446Multiple RR SquareAdjusted R SquareStandard ErrorObservationsANOVASignificance F235234.9951.060236.015117.4780.353Regression 332.528 0.000ResidualTotaldf SS MS F-44.19216.334-0.8208.2872.4900.182-5.3336.560-4.4940.0130.0070.021Interceptxx-sqCoefficientsStandardError t Stat P-value a. Plot the data points. Does it look as though thequadratic model is necessary?b. Find s on the printout. Confirm thats n SSkE 1c. Do the data provide sufficient evidence to indicatethat the model contributes information for the predictionof y? What is the p-value for this test, andwhat does it mean?d. What sign would you expect the actual value ofb2 to have? Find the value of b2 in the printout.Does this value confirm your expectation?e. Do the data indicate a significant curvature in therelationship between y and x? Test at the 5% levelof significance.f. What conclusions can you draw from the accompanyingresidual plots?