Exercise 1413 Compute b1 and b0 to 4 decimals b1 b0 Comple

{Exercise 14.13}

Compute b1 and b0 (to 4 decimals).

b1   ______   
b0   ______   

Complete the estimated regression equation (to 2 decimals).
= ____ + ____   x

Predict a reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52.5 thousand (to 2 decimals).
______ thousand dollars

What is the value, in dollars, of the deductions calculated in part (c) above (to the nearest whole number)?
$ ______   

If this taxpayer claimed itemized deductions of $20,400, would the IRS agent\'s request for an audit appear justified?
_________________

Solution

      Which of the following scatter diagrams accurately represents the data

Scatter diagram 1

Regression Analysis

r²

0.955

n

7

r

0.977

k

1

Std. Error

1.372

Dep. Var.

deduction

ANOVA table

Source

SS

df

MS

F

p-value

Regression

199.0083

1  

199.0083

105.79

.0001

Residual

9.4060

5  

1.8812

Total

208.4143

6  

Regression output

confidence interval

variables

coefficients

std. error

   t (df=5)

p-value

95% lower

95% upper

Intercept

4.6768

1.0334

4.526

.0063

2.0203

7.3332

Income

0.1613

0.0157

10.285

.0001

0.1210

0.2016

Predicted values for: deduction

95% Confidence Interval

95% Prediction Interval

Income

Predicted

lower

upper

lower

upper

Leverage

52.5

13.1455

11.8006

14.4904

9.3720

16.9191

0.146

Compute b1 and b0 (to 4 decimals).

b1   0.16  
b0   4.68   

Complete the estimated regression equation (to 2 decimals).
= 4.68 + 0.16  x

Predict a reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52.5 thousand (to 2 decimals).
13.15 thousand dollars

What is the value, in dollars, of the deductions calculated in part (c) above (to the nearest whole number)?
$ 13150

If this taxpayer claimed itemized deductions of $20,400, would the IRS agent\'s request for an audit appear justified?
IRS agent\'s request for an audit appear not justified, because expected deductions calculated is $13150.

Regression Analysis
	r²	0.955	n	7
	r	0.977	k	1
	Std. Error	1.372	Dep. Var.	deduction
ANOVA table
Source	SS	df	MS	F	p-value
Regression	199.0083	1	199.0083	105.79	.0001
Residual	9.4060	5	1.8812
Total	208.4143	6
Regression output				confidence interval
variables	coefficients	std. error	t (df=5)	p-value	95% lower	95% upper
Intercept	4.6768	1.0334	4.526	.0063	2.0203	7.3332
Income	0.1613	0.0157	10.285	.0001	0.1210	0.2016
Predicted values for: deduction
		95% Confidence Interval	95% Prediction Interval
Income	Predicted	lower	upper	lower	upper	Leverage
52.5	13.1455	11.8006	14.4904	9.3720	16.9191	0.146