Question: A firm is experiencing theft problems at its warehouse. A consultant to the firm believes that the dollar loss from theft each week (T) depends

A firm is experiencing theft problems at its warehouse. A consultant to the firm believes

that the dollar loss from theft each week (T) depends on the number of security guards

(G) and on the unemployment rate in the county where the warehouse is located

(U measured as a percent). In order to test this hypothesis, the consultant estimated the

regression equation T = a + bG + cU and obtained the following results:

Dependent Variable: T R squared F-ratio P - Value on F

Observations: 27 .7793 42.38 .0001

Variable Parameter Est. Standard Error T-Ratio P-Value

Intercept 5150.43 1740.72 2.96 .0068

G -480.92 130.66 -3.68 .0012

U 211.0 75.0 2.81 .0096

Based on the above information, a one percent increase in the level of unemployment in

the county results in an increase in losses due to theft of ________ more losses per

week.

$280

$460

$75

$211

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