Abby Kuntz, a market specialist at the market research firm of Saez, Gann, and Spitz, is analyzing household budget data collected by her firm.Abby's dependent variable is monthly household expenditures on groceries (in $'s), and her independent variable is annual household income (in $1,000's).Regression analysis of the data yielded the following tables: Abby's regression model is ___.
A)y = 39.15 + 2.79x
B)y = 39.15 - 1.79x
C)y = 1.79 + 39.15x
D)y = -1.79 + 39.15x
E)y = 39.15 + 1.79x

Question

Abby Kuntz, a market specialist at the market research firm of Saez, Gann, and Spitz, is analyzing household budget data collected by her firm.Abby's dependent variable is monthly household expenditures on groceries (in $'s), and her independent variable is annual household income (in $1,000's).Regression analysis of the data yielded the following tables:   Abby's regression model is ___.
A)y = 39.15 + 2.79x 
B)y = 39.15 - 1.79x 
C)y = 1.79 + 39.15x 
D)y = -1.79 + 39.15x 
E)y = 39.15 + 1.79x

Quizplus · Accepted Answer

Looking at the regression equation, the intercept is 39.15, which means that even if annual household income is 0, monthly household expenditure on groceries would still be $39.15. The slope of 1.79 indicates that for every $1,000 increase in annual household income, monthly household expenditures on groceries increase by $1.79. Therefore, the regression model is y = 39.15 + 1.79x.

Abby Kuntz, a Market Specialist at the Market Research Firm