You have estimated the following equation: = 607.3 + 3.85 Income - 0.0423 Income2, where TestScore is the average of the reading and math scores on the Stanford 9 standardized test administered to 5th grade students in 420 California school districts in 1998 and 1999.Income is the average annual per capita income in the school district,measured in thousands of 1998 dollars.The equation
A)suggests a positive relationship between test scores and income for most of the sample.
B)is positive until a value of Income of 610.81.
C)does not make much sense since the square of income is entered.
D)suggests a positive relationship between test scores and income for all of the sample.

Question

You have estimated the following equation:  = 607.3 + 3.85 Income - 0.0423 Income2, where TestScore is the average of the reading and math scores on the Stanford 9 standardized test administered to 5th grade students in 420 California school districts in 1998 and 1999.Income is the average annual per capita income in the school district,measured in thousands of 1998 dollars.The equation
A)suggests a positive relationship between test scores and income for most of the sample. 
B)is positive until a value of Income of 610.81. 
C)does not make much sense since the square of income is entered. 
D)suggests a positive relationship between test scores and income for all of the sample.

Quizplus · Accepted Answer

The positive coefficient on income suggests a positive relationship between income and test scores. Additionally, the negative coefficient on the squared income term suggests that the relationship between income and test scores may flatten out or even turn negative at some point, but this does not change the overall positive relationship between income and test scores for most of the sample.

You Have Estimated the Following Equation: = 607