The spending (in billions of dollars) by Medicaid, the national health-care plan for the poor, over the 5-year period from 1988 to 1992 is summarized in the following table. (Here, x = 0 represents the beginning of the year 1988.)
Find an equation of the least-squares line for these data. Please round the coefficients in your equation to three decimal places. Use the result of to estimate Medicaid spending in Massachusetts for the year 2001, assuming the trend continued.
A) y = 0.113x + 1.546; $3.015 billion
B) y = 0.114x + 1.550; $3.004 billion
C) y = 0.114x + 1.550; $3.032 billion
D) y = 0.113x + 1.546; $2.959 billion

Question

The spending (in billions of dollars) by Medicaid, the national health-care plan for the poor, over the 5-year period from 1988 to 1992 is summarized in the following table.  (Here, x = 0 represents the beginning of the year 1988.)
Find an equation of the least-squares line for these data. Please round the coefficients in your equation to three decimal places. Use the result of to estimate Medicaid spending in Massachusetts for the year 2001, assuming the trend continued.
A) y = 0.113x + 1.546; $3.015 billion 
B) y = 0.114x + 1.550; $3.004 billion 
C) y = 0.114x + 1.550; $3.032 billion 
D) y = 0.113x + 1.546; $2.959 billion

Quizplus · Accepted Answer

Using a regression calculator or software, we obtain the equation of the least-squares line as:

y = 0.114x + 1.550

To estimate Medicaid spending in Massachusetts for the year 2001, we substitute x = 13 (since 2001 is 13 years after 1988) into the equation:

y = 0.114(13) + 1.550 = 3.032 billion

Therefore, the best choice is C.

The Spending (In Billions of Dollars) by Medicaid, the National