A regression analysis between sales (in $1000) and advertising (in $100) resulted in the following least-squares line: = 77 + 8x. This implies that if advertising is $600, then the predicted amount of sales is $125,000.

Question

A regression analysis between sales (in $1000) and advertising (in $100) resulted in the following least-squares line:  = 77 + 8x. This implies that if advertising is $600, then the predicted amount of sales is $125,000.

Quizplus · Accepted Answer

Using the given least-squares line, we can plug in the value of $600 for x (advertising) and solve for the predicted amount of sales:

Sales = 77 + 8(600)
Sales = 77 + 4800
Sales = 4877

When we convert this to thousands of dollars, we get $4,877, which means the predicted amount of sales is $4,877, not $125,000. Therefore, the statement is false, and the answer is B.

A Regression Analysis Between Sales (In $1000) and Advertising (In