Question

QUESTION 4 1 points Save A fan of television game shows has observed that, in general, the more educated the contestant, the less money he or she wins. To test her belief she gathers data about the last five winners of her favorite game show. She records their winnings in dollars and the number of years of education. The data are as follows. Years of education Winnings 500 16 400 12 600 16 300 14 700 She estimated a regression model using winnings as the dependent variable (Y) and years of education as the independent variable (X). She used the ordinary least squares estimator. What is the predicted change in winnings when the education of the winner increases by a year? a. decrease by $12.5 O b. decrease by $25 O C. decrease by $62.5 O d. decrease by $50 o e. decrease by $37.5

Answer 1

y = -50c + 1200

slope= -50

d) decreases by $50

Years of education Winnings Chart Title 14 Surini near Series) 0 2 1 12 14 16 18 3 10 Anis Title