Alan Bissell,a market analyst for City Sound Mart,is analyzing sales of heavy metal CD's.Alan's dependent variable is annual heavy metal CD sales (in $1,000,000's),and his independent variables are teenage population (in 1,000's)and type of sales district (0 = urban,1 = rural).Regression analysis of the data yielded the following tables: For two sales districts with the same number of teenagers one urban and one rural,Alan's model predicts ___.
A)$1,566,666 higher sales in the rural district
B)the same sales in both districts
C)$1,566,666 lower sales in the rural district
D)$1,700,000 higher sales in the urban district
E)$ 1,700,000 lower sales in the rural district

Question

Alan Bissell,a market analyst for City Sound Mart,is analyzing sales of heavy metal CD's.Alan's dependent variable is annual heavy metal CD sales (in $1,000,000's),and his independent variables are teenage population (in 1,000's)and type of sales district (0 = urban,1 = rural).Regression analysis of the data yielded the following tables:  For two sales districts with the same number of teenagers one urban and one rural,Alan's model predicts ___.
A)$1,566,666 higher sales in the rural district 
B)the same sales in both districts 
C)$1,566,666 lower sales in the rural district 
D)$1,700,000 higher sales in the urban district 
E)$ 1,700,000 lower sales in the rural district

Quizplus · Accepted Answer

The regression analysis shows that the coefficient for the type of sales district (rural = 1, urban = 0) is negative (-1.566), indicating that sales in rural districts are expected to be lower than in urban districts, holding all other factors constant. Therefore, for two sales districts with the same number of teenagers, the model predicts $1,566,666 lower sales in the rural district.

Alan Bissell,a Market Analyst for City Sound Mart,is Analyzing Sales