Data is collected from a sample of 1,000 US households in an attempt to understand the relationship between income and money spent eating out at restaurants. A regression is estimated based on the data, and the equation is as follows: Spending; 10.12 + 0.25 * Income; + 756.48 * City: 122.96 * Children - where restaurant spending and income are yearly values measure in $, city is a binary variable that takes on a 1 if the household lives in a city, and children is the number of children in the family. What is the predicted restaurant spending for a household with a yearly income of $50,000, not located in a city, and with 3 children? $12,387.16 $12,141.24 $12,131.12 $12,897.72
Data is collected from a sample of 1,000 US households in an attempt to understand the relationship between income and money spent eating out at restaurants. A regression is estimated based on the data, and the equation is as follows: Spending; 10.12 + 0.25 * Income; + 756.48 * City: 122.96 * Children - where restaurant spending and income are yearly values measure in $, city is a binary variable that takes on a 1 if the household lives in a city, and children is the number of children in the family. What is the predicted restaurant spending for a household with a yearly income of $50,000, not located in a city, and with 3 children? $12,387.16 $12,141.24 $12,131.12 $12,897.72
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Data is collected from a sample of 1,000 US households in an attempt to understand
the relationship between income and money spent eating out at restaurants. A
regression is estimated based on the data, and the equation is as follows:
Spending;
10.12 + 0.25 * Income; + 756.48 * City:
122.96 * Children
where restaurant spending and income are yearly values measure in $, city is a binary
variable that takes on a 1 if the household lives in a city, and children is the number
of children in the family. What is the predicted restaurant spending for a household
with a yearly income of $50,000, not located in a city, and with 3 children?
$12,387.16
$12,141.24
$12,131.12
$12,897.72](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff5b38737-622a-40a2-b080-ce81f34e7ad0%2F64995e27-efea-4be2-8a94-3615de467c4f%2Ff9owz9f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Data is collected from a sample of 1,000 US households in an attempt to understand
the relationship between income and money spent eating out at restaurants. A
regression is estimated based on the data, and the equation is as follows:
Spending;
10.12 + 0.25 * Income; + 756.48 * City:
122.96 * Children
where restaurant spending and income are yearly values measure in $, city is a binary
variable that takes on a 1 if the household lives in a city, and children is the number
of children in the family. What is the predicted restaurant spending for a household
with a yearly income of $50,000, not located in a city, and with 3 children?
$12,387.16
$12,141.24
$12,131.12
$12,897.72
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