# Question

Exercise 13. 16 described a regression analysis in which y = sales revenue and x = advertising expenditure. Summary quantities given there yield

a. Test the hypothesis H0: b = 0 versus Ha: b = 0 using a significance level of .05. What does your conclusion say about the nature of the relationship between x and y?

b. Consider the hypothesis H0: b = 40 versus Ha: b . 40. The null hypothesis states that the average change in sales revenue associated with a 1-unit increase in advertising expenditure is (at most) $40,000. Carry out a test using significance level .01.

a. Test the hypothesis H0: b = 0 versus Ha: b = 0 using a significance level of .05. What does your conclusion say about the nature of the relationship between x and y?

b. Consider the hypothesis H0: b = 40 versus Ha: b . 40. The null hypothesis states that the average change in sales revenue associated with a 1-unit increase in advertising expenditure is (at most) $40,000. Carry out a test using significance level .01.

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