BUS352 Chapter 13 Problems

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Chapter13Problems.xlsx

13.3

13.3 A small business analyst seeks to determine which variables
should be used to predict small-business mean annual revenue
for U.S. metropolitan areas. The analyst decides to consider
the independent variables age, the mean age (in months) of small
businesses in the metropolitan area; and BizAnalyzer, the mean
BizAnalyzer score of small businesses in the metropolitan area.
(The BizAnalyzer score measures on a scale of 1 to100 the level
of risk that the small businesses in the metropolitan area present to
potential lenders.) The dependent variable, revenue, is mean annual
revenue. Using data collected from a sample of 25 metropolitan
areas, the regression results are:
a. State the multiple regression equation.
b. Interpret the meaning of the slopes, b1 and b2, in this problem.
c. What conclusions can you reach concerning mean annual
revenue?

13.5

13.5 The production of wine is a multibillion-dollar worldwide
industry. In an attempt to develop a model of wine quality
as judged by wine experts, data was collected from red wine
variants of Portuguese “Vinho Verde” wine. A sample of 50
wines is stored in VinhoVerde . (Data extracted from P. Cortez,
A. Cerdeira, F. Almeida, T. Matos, and J. Reis, “Modeling Wine
Decision Support Systems, 47, 2009, pp. 547–553 and bit.ly/
9xKlEa.) Develop a multiple linear regression model to predict
wine quality, measured on a scale from 0 (very bad) to 10 (excellent)
based on alcohol content (%) and the amount of chlorides.
a. State the multiple regression equation.
b. Interpret the meaning of the slopes, b1 and b2, in this problem.
c. E xplain why the regression coefficient, b0, has no practical
meaning in the context of this problem.
d. Predict the mean wine quality rating for wines that have 10%
alcohol and chlorides of 0.08.
e. Construct a 95% confidence interval estimate for the mean
wine quality rating for wines that have 10% alcohol and chlorides
of 0.08.
f. Construct a 95% prediction interval for the wine quality rating for
an individual wine that has 10% alcohol and chlorides of 0.08.
g. What conclusions can you reach concerning this regression
model?