Use the model from Exercise to extrapolate to 1960 and predict the hourly average wage. Why is this prediction nonsensical?
Exercise
Business The following table gives the average hourly earnings (in dollars) of U.S. production workers from 1970 to 2010. (Data from: U.S. Bureau of Labor Statistics.)
Year | Average Hourly Wage (Dollars) |
1970 | 3.40 |
1975 | 4.73 |
1980 | 6.85 |
1985 | 8.74 |
1990 | 10.20 |
1995 | 11.65 |
2000 | 14.02 |
2005 | 16.13 |
2010 | 16.26 |
If you have appropriate technology, verify that the least-squares regression line that models these data (with coefficients rounded) is y = .343x - 20.65 , where y is the average hourly wage in year x and x = 0 corresponds to 1900.
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