TABLE 14-2
A professor of industrial relations believes that an individual's wage rate at a factory (Y) depends on his performance rating (X₁) and the number of economics courses the employee successfully completed in college (X₂). The professor randomly selects 6 workers and collects the following information:
-Referring to Table 14-2, suppose an employee had never taken an economics course and managed to score a 5 on his performance rating. What is his estimated expected wage rate?
A) 10.90
B) 12.20
C) 17.23
D) 25.11

Question

TABLE 14-2
A professor of industrial relations believes that an individual's wage rate at a factory (Y) depends on his performance rating (X₁) and the number of economics courses the employee successfully completed in college (X₂). The professor randomly selects 6 workers and collects the following information: 
-Referring to Table 14-2, suppose an employee had never taken an economics course and managed to score a 5 on his performance rating. What is his estimated expected wage rate?
A) 10.90 
B) 12.20 
C) 17.23 
D) 25.11

Quizplus · Accepted Answer

The estimated expected wage rate can be calculated using the regression equation:
Y = β₀ + β₁X₁ + β₂X₂
Substituting the values from the table, we get:
Y = 1.93 + 1.59(X₁) + 2.76(X₂)
Since the employee has never taken an economics course, X₂ = 0
Substituting X₁ = 5 and X₂ = 0, we get:
Y = 1.93 + 1.59(5) + 2.76(0)
Y = 12.20
Therefore, the estimated expected wage rate for the employee is $12.20. Thus, the best choice is B.

TABLE 14-2 A Professor of Industrial Relations Believes That an Individual's Wage