Consider the following to answer the question(s) below:
A sample of 30 companies was randomly selected for a study investigating what factors affect the size of company bonuses. Data were collected on the number of employees at the company and whether or not the employees were unionized (1 = yes, 0 = no). The following multiple regression model was fit to the data.
-The estimated regression model is
A) Average Annual Bonus = 347.9 + 0.6547 Employees + 1259.5 Union.
B) Average Annual Bonus = 872.2 + 0.1105 Employees + 605.8 Union.
C) Average Annual Bonus = 0.40 + 8.92 Employees + 2.08 Union.
D) Average Annual Bonus = 0.6547 Employees + 1259.5 Union.
E) Average Annual Bonus = 347.9 + 872.2 Employees + 0.40 Union.

Question

Consider the following to answer the question(s) below:
A sample of 30 companies was randomly selected for a study investigating what factors affect the size of company bonuses. Data were collected on the number of employees at the company and whether or not the employees were unionized (1 = yes, 0 = no). The following multiple regression model was fit to the data. 
-The estimated regression model is
A) Average Annual Bonus = 347.9 + 0.6547 Employees + 1259.5 Union. 
B) Average Annual Bonus = 872.2 + 0.1105 Employees + 605.8 Union. 
C) Average Annual Bonus = 0.40 + 8.92 Employees + 2.08 Union. 
D) Average Annual Bonus = 0.6547 Employees + 1259.5 Union. 
E) Average Annual Bonus = 347.9 + 872.2 Employees + 0.40 Union.

Quizplus · Accepted Answer

The correct choice is A because it follows the standard format of a linear regression equation, which typically includes an intercept (347.9) and coefficients for each independent variable (0.6547 for Employees and 1259.5 for Union), indicating how much the dependent variable (Average Annual Bonus) is expected to change with a one-unit change in the independent variables, assuming all other variables are held constant.

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