Answered: As the net annual family income…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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Question

Consider the following regression equation representing the linear relationship between the Canada Child Benefit provided for a married couple with 3 children under the age of 6, based on their annual family net income:

ŷ =121.09−0.57246xR2=0.894

where y= annual Canada Child Benefit paid (in $100s)
x = net annual family income (in $1000s)

Source: Canada Revenue Agency

a. As the net annual family income increases, does the Canada Child Benefit paid increase or decrease? Based on this, is the correlation between the two variables positive or negative?
The Canada Child Benefit paid ?

.
The correlation between the two variables is ?

.
b. Calculate the correlation coefficient and determine if the relationship between the two variables is strong, moderate or weak.
r=

, the relationship is ?

Round to 3 decimal places

c. Interpret the value of the slope as it relates to this relationship.

For every $1 increase in annual family net income, there is a $0.57246 decrease in the Canada Child Benefit paid.

For every $100 increase in annual family net income, there is a $572.46 decrease in the Canada Child Benefit paid.

For every $1000 increase in annual family net income, there is a $57.746 decrease in the Canada Child Benefit paid.

For every $100 increase in annual family net income, there is a $57,246 decrease in the Canada Child Benefit paid.

d. What will be the estimated Canada Child Benefit be (in dollars) for a married couple with 3 children under the age of 6 if the net annual family income is $83,100?

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