Question

8. A politician feels Tax Revenues (TR) are a function of Consumer Incomes (Cl). Data collecte or several taxpayers are shown below. Estimate and interpret the regression model. CIRCLE YOUR ANSWERS USE THE TABLE BELOW TO ORGANIZE YOUR COMPUTATIONS Tax Consumer Revenues(Y)Income (x) Fred Sam Jane Mary Paul Al Jenny Don Bob 61 43 43 39 15 25 20 10 51 46 43 41 43 42 12 6 9. Given the values from the previous problem calculate and interpret the standard error of the cstimate. Use a graph to illustrate and explain how it can he used as a mcasure of goodness of fit. 10. Based on the data above for taxes and incomes, test the significance of the regression coefficient at the 5% level. Clearly show all four steps, what is the p-value associated with the test?

Answer 1

8)

Y^= 39.1672 + 0.4481

slope -

when consumer income increases by 1 unit , tax revenue increases by 0.4481 unit