Question Help ? An online clothing retaler examined their transactional database

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Question Help ? An online clothing retaler examined their transactional database to see if total yearly Purchases (3) were related to customers' Incomes (S). (You may assume that the assumptions and conditions for regression are met.) The least squares inear regression is shown below. Complete parts a through d Purchases -27.1+0.0180ncome) a) Interpret the intercept in the linear model. Select the correct choice below and fill in the answer box to complete your choice. Type an integer or a decimal.) O A The intercept of is meaningless and should not be interpreted OB. The intercept of indicates the customer Income it the predicted total yearly Purchase was so oc. The intercept of ?indicanes the predicted total yearly Purchase if a customer's income was so O D. The intercept indicates that customer Income changes by $ for every $1 increase in total yesarly Purchase b) Interpret the slope in the inear model. Select the correct choice below and fial in the arswer box to complete your choice (Type an integer or a decimal.) O A. The slope indicates that the total yearly Purchase changes by $ for every $1 increase in customer Income OB. The slope of indicates the customer Income it the predicted total yearty Purchase was $o ?C. The sloped.] is meaningless and should not be interpreted. O D. The slope indicates that customer Income changes by $ for every $1 increase in total yearly Purchase c) if a customer has an Income of $20,000, what is his predicted total yearly Purchases? (Type an integer or a decimal.) 6) This customer's yearly Purchases were actualy $300. What is the residual using this linear moder? Did the model provide an underestsmate or overestimate for is

Explanation / Answer

a) A. (Purchase can't be negative, so it's not realistic)

b) A

c) Total yearly purchases = -27.1 + 0.018*20000 = 332.9 = 333

d) Residual = 300 - 333 = -33 < 0, the model provides overestimate for the customer

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