Abby Kratz,a market specialist at the market research firm of Saez,Sikes,and Spitz,is analyzing household budget data collected by her firm. Abby's dependent variable is weekly household expenditures on groceries (in $'s),and her independent variables are annual household income (in $1,000's)and household neighborhood (0 = suburban,1 = rural). Regression analysis of the data yielded the following table. For a rural household with $90,000 annual income,Abby's model predicts weekly grocery expenditure of ________________.

Question

Abby Kratz,a market specialist at the market research firm of Saez,Sikes,and Spitz,is analyzing household budget data collected by her firm. Abby's dependent variable is weekly household expenditures on groceries (in $'s),and her independent variables are annual household income (in $1,000's)and household neighborhood (0 = suburban,1 = rural). Regression analysis of the data yielded the following table.  For a rural household with $90,000 annual income,Abby's model predicts weekly grocery expenditure of ________________.

Quizplus · Accepted Answer

Using the regression equation given in the table, we can plug in the values for a rural household with $90,000 annual income:

Weekly grocery expenditure =  -32.43 + (0.182 * 90) + (169.55 * 1) 
Weekly grocery expenditure = $224.98

Therefore, the predicted weekly grocery expenditure for a rural household with $90,000 annual income is $224.98.

Abby Kratz,a Market Specialist at the Market Research Firm of Saez,Sikes,and