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In the following regression, X = weekly pay, Y = income tax withheld, and n = 35

ID: 2959003 • Letter: I

Question

In the following regression, X = weekly pay, Y = income tax withheld, and n = 35 McDonald’s employees. (a) Write the fitted regression equation. (b) State the degrees of freedom for a two- tailed test for zero slope, and use Appendix D to find the critical value at a = .05. (c) What is your conclusion about the slope? (d) Interpret the 95 percent confidence limits for the slope. (e) Verify that F = t2 for the slope. (f) In your own words, describe the fit of this regression.

R2 = 0.202
Std. Error = 6.816
n = 35

ANOVA Table
Source              SS             df          MS          F         p-value
Regression      387.6959     1       387.6959    8.35     0.0068
Residual         1533.0614   33        46.4564
TOTAL           1920.7573    34

REGRESSION OUTPUT                                         Confidence Interval
Variables  Coefficients Std. Error t(df=33) p-value 95%lower 95%upper
Intercept  30.7963       6.4078     4.806     0.0000  17.7595   43.8331
Slope        0.0343        0.0119     2.889     0.0068   0.0101    0.0584

Explanation / Answer

(a) Write the fitted regression equation. y=30.7963+0.0343x ------------------------------------------------------------------------- (b) (b) State the degrees of freedom for a two- tailed test for zero slope, and use Appendix D to find the critical value at a = .05. df=35-2=33 critical value = |t(0.025, df=33)|=2.03 (check student t table) --------------------------------------------------------------------------------- (c) What is your conclusion about the slope? The p-value is 0.0068< 0.025, we reject Ho. -------------------------------------------------------------------------------------- (d) Interpret the 95 percent confidence limits for the slope. We have 95% confidence that the slope of the regression line is between 0.0101 and 0.0584. ------------------------------------------------------------------------------------------------ (e) Verify that F = t2 for the slope. F=8.35 t^2 =2.889^2=8.346 So F=t^2 -------------------------------------------------------------------------------------------------------- (f) In your own words, describe the fit of this regression. Good of fittness.
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