AnswersDRHS GA-Statistical ReasoningMaking Predictions from a Least-Squares Regression LineQuestion 7
7
QuizMultiple Choice

Making Predictions from a Least-Squares Regression Line

Question 7 • DRHS GA-Statistical Reasoning

Market researchers were interested in the relationship between the price of bobbleheads and the demand of bobbleheads. Information was collected from a survey and was used to obtain the regression equation ŷ = –0.277x + 50.455, where x represents the price of a bobblehead (measured in dollars) and ŷ is the predicted demand of bobbleheads (in units). Which statement best describes the meaning of the slope of the regression line?

Answer
A
For each increase in demand by 1 unit, the predicted price decreases by $0.227.
B
For each increase in demand by 1 unit, the predicted price decreases by $50.455.
C
For each increase in price by $1, the predicted demand decreases by 0.227 units.
D
For each increase in price by $1, the predicted demand decreases by 50.455 units.

Explanation

The slope is −0.277, so for each $1 increase in price, predicted demand decreases by 0.277 units. Choice C describes the correct direction and variables, but says 0.227 rather than 0.277; that appears to be a typo. The intercept, 50.455, is not the change in demand for each $1 increase.

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