Question 2      (21
points)
Part (a)
           (2
points)

Use the “Assignment 3 Bus Maintenance.xls” file posted with this
assignment to run one multiple regression that has “maintenance
cost per month” as the dependent variable and “age,” “miles per
month,” the “engine type” dummy variable, and “seating capacity” as
independent variables.

Part (b)
           (3
points)

Interpret the estimated value of the intercept, i.e., explain
what the number means in this regression.

Part
(c)           
(2 points)

Please state whether or not the intercept estimate in the
previous part makes sense and explain your answer.

Part (d)
           (3
points)

Interpret the estimated value of the coefficient for “miles per
month” i.e., explain what the number means in this regression.

Part (e)
           (3
points)

Interpret the estimated value of the coefficient for the “engine
type” dummy variable, i.e., explain what the number means in this
regression.

Part
(f)            
(2 points)

Which of the four slope estimates are statistically significant?
Explain how you can tell.

Part
(g)           
(2 points)

What is the predicted maintenance cost for a four-year old bus
with a gasoline engine that is driven 750 miles per month and has a
seating capacity of 55?

Part
(h)           
(1 point)

How much of the variation in the dependent variable can be
explained by variation in the independent variables?

Part (i)
           
(3 points)

As you can see from the R-Squared, the four included independent
variables explain about 45 percent of the variation in maintenance
cost. If we ran another regression that was just like the one
above, but included one additional regressor that is the number of
letters in the bus driver’s last name, what would happen to
R-Squared? Explain your answer and state whether that is a good
thing or a bad thing.