COMPLETE THIS PROBLEM BY FILLING IN THE YELLOW CELLS George Bailey, the manager at a small soda shoppe in Phoenix, Arizona, is concerned that the weak economic environment has hampered foot traffic in his area, thus causing a dramatic decline in sales His cousin in San Francisco, Sam Wainwright, owns a similar shoppe, but he has seemed to prosper during these rough economic times Sam agrees that higher unemploment rates have likely forced some customers to dine out less frequently, but he maintains an aggressive marketing campaign to thwart this apparent trend For instance, he advertises in local papers with valuable two for one coupons and promotes early bird specials over the airwaves Despite the fact that advertising increases overall costs, he believes that this campaign has positively affected sales at his restaurant In order to support his claim, Sam provides his restaurant's monthly sales (in $1,000s) and advertising costs (in $), as well as the monthly unemployment rate (in ) from San Francisco County Month Year Sales Advertising Cost Unemployment January 2008 27 550 4 6 February 2008 24 2 425 4 3 March 2008 25 6 450 4 6 April 2008 28 5 625 4 3 May 2008 30 8 650 4 8 June 2008 31 5 675 5 2 July 2008 34 9 700 5 6 August 2008 32 5 650 5 8 September 2008 30 4 550 5 5 October 2008 31 525 5 8 November 2008 28 5 500 6 December 2008 29 600 6 5 January 2009 26 2 575 8 February 2009 25 4 625 8 4 March 2009 27 8 650 9 1 April 2009 26 5 600 8 9 May 2009 27 4 550 9 1 Please round ALL numerical answers to 4 decimal places Estimate a simple regression model with Advertising (7 points Sales Bo BiAdvertising Estimate a multiple regression model with Advertising and Unemployment (7 points Sales Bo BiAdvertising 82 Unemployment 8 Which regression model is more appropriate for making predictions Why (5 points Discuss both R and the standard error of the estimate ) Make predictions for sales with an unemployment rate of 6 and advertising costs Sales Make predictions for sales with an unemployment rate of 6 and advertising costs Sales 12 What is the difference in sales between these two predicted values Why does this number make sense (5 points

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COMPLETE THIS PROBLEM BY FILLING IN THE YELLOW CELLS. George Bailey, the manager at a small soda shoppe in Phoenix, Arizona, is concerned that the

COMPLETE THIS PROBLEM BY FILLING IN THE YELLOW CELLS.

George Bailey, the manager at a small soda shoppe in Phoenix, Arizona, is concerned that the weak economic environment has hampered foot traffic in his area, thus causing a dramatic decline in sales. His cousin in San Francisco, Sam Wainwright, owns a similar shoppe, but he has seemed to prosper during these rough economic times. Sam agrees that higher unemploment rates have likely forced some customers to dine out less frequently, but he maintains an aggressive marketing campaign to thwart this apparent trend. For instance, he advertises in local papers with valuable two-for-one coupons and promotes early-bird specials over the airwaves. Despite the fact that advertising increases overall costs, he believes that this campaign has positively affected sales at his restaurant. In order to support his claim, Sam provides his restaurant's monthly sales (in $1,000s) and advertising costs (in $), as well as the monthly unemployment rate (in %) from San Francisco County.

Month	Year	Sales	Advertising Cost	Unemployment
January	2008	27	550	4.6
February	2008	24.2	425	4.3
March	2008	25.6	450	4.6
April	2008	28.5	625	4.3
May	2008	30.8	650	4.8
June	2008	31.5	675	5.2
July	2008	34.9	700	5.6
August	2008	32.5	650	5.8
September	2008	30.4	550	5.5
October	2008	31	525	5.8
November	2008	28.5	500	6
December	2008	29	600	6.5
January	2009	26.2	575	8
February	2009	25.4	625	8.4
March	2009	27.8	650	9.1
April	2009	26.5	600	8.9
May	2009	27.4	550	9.1

Please round ALL numerical answers to 4 decimal places. Estimate a simple regression model with Advertising. (7 points] Sales = Bo + BiAdvertising + Estimate a multiple regression model with Advertising and Unemployment. (7 points] Sales = Bo + BiAdvertising +82 Unemployment + 8 Which regression model is more appropriate for making predictions? Why? (5 points] [ Discuss both R& and the standard error of the estimate.) Make predictions for sales with an unemployment rate of 6% and advertising costs Sales Make predictions for sales with an unemployment rate of 6% and advertising costs Sales 12 What is the difference in sales between these two predicted values? Why does this number make sense? (5 points]