Consumer Research, Inc., is an independent agency that conducts research on consumer attitudes and behaviors for a variety of firms. In one study, a client asked for an investigation of consumer characteristics that can be used to predict the amount charged by credit card users. Data were collected on annual income, household size, and annual credit card charges for a sample of 50 consumers. The following data are contained in the file Consumer.   A. Develop scatter plots of amount charged versus annual income, and amount charged versus household size. Comment on the relationship between amount charged and these two variables.   B. Develop an estimated regression equation that can be used to predict the amount charged given the two independent variables (annual income, and household size).                   C. Interpret the coefficients on the annual income, and household size variables.

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter1: Fundamental Concepts Of Algebra
Section1.4: Fractional Expressions
Problem 66E
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Consumer Research, Inc., is an independent agency that conducts research on consumer attitudes and behaviors for a variety of firms. In one study, a client asked for an investigation of consumer characteristics that can be used to predict the amount charged by credit card users. Data were collected on annual income, household size, and annual credit card charges for a sample of 50 consumers. The following data are contained in the file Consumer.

 

A. Develop scatter plots of amount charged versus annual income, and amount charged versus household size. Comment on the relationship between amount charged and these two variables.

 

B. Develop an estimated regression equation that can be used to predict the amount charged given the two independent variables (annual income, and household size).

 

 

 

 

 

 

 

 

 

C. Interpret the coefficients on the annual income, and household size variables.

 

 

 

 

 

 

 

 

 

D. Do a residual plot of standard residuals on the predicted values. Are all four regression assumptions satisfied?

                 
Income
($1000s)
54
30
32
50
31
55
37
40
66
51
25
48
27
33
65
63
42
21
44
37
62
21
55
42
41
54
30
48
34
67
50
67
55
52
62
64
22
29
39
35
39
54
23
27
26
61
30
22
46
66
Househol Amount
d
Charged
Size
(S)
3
4,016
2
3,159
4
5,100
5
4,742
2
1,864
2
4,070
1
2
4
3
3
4
1
2
3
4
6
2
1
5
6
3
7
2
7
6
1
2
5
4
2
5
6
2
3
2
3
4
2
1
4
3
6
2
7
2
UN
2
4
5
4
2,731
3,348
4,764
4,110
4,208
4,219
2,477
2,514
4,214
4,965
4,412
2,448
2,995
4,171
5,678
3,623
5,301
3,020
4,828
5,573
2,583
3,866
3,586
5,037
3,605
5,345
5,370
3,890
4,705
4,157
3,579
3,890
2,972
3,121
4,183
3,730
4,127
2,921
4,603
4,273
3,067
3,074
4,820
5,149
Transcribed Image Text:Income ($1000s) 54 30 32 50 31 55 37 40 66 51 25 48 27 33 65 63 42 21 44 37 62 21 55 42 41 54 30 48 34 67 50 67 55 52 62 64 22 29 39 35 39 54 23 27 26 61 30 22 46 66 Househol Amount d Charged Size (S) 3 4,016 2 3,159 4 5,100 5 4,742 2 1,864 2 4,070 1 2 4 3 3 4 1 2 3 4 6 2 1 5 6 3 7 2 7 6 1 2 5 4 2 5 6 2 3 2 3 4 2 1 4 3 6 2 7 2 UN 2 4 5 4 2,731 3,348 4,764 4,110 4,208 4,219 2,477 2,514 4,214 4,965 4,412 2,448 2,995 4,171 5,678 3,623 5,301 3,020 4,828 5,573 2,583 3,866 3,586 5,037 3,605 5,345 5,370 3,890 4,705 4,157 3,579 3,890 2,972 3,121 4,183 3,730 4,127 2,921 4,603 4,273 3,067 3,074 4,820 5,149
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D. Do a residual plot of standard residuals on the predicted values. Are all four regression assumptions satisfied?

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