Many entrepreneurs have donated money to various causes. Data on the total amount pledged and remaining net worth for the 10 top donors are given in the table. Complete part a through d.
|
Donor
|
Pledged ($ Millions)
|
Net Worth ($ Millions)
|
|
1
|
7,619
|
4,620
|
|
2
|
5,735
|
50,520
|
|
3
|
2,043
|
40,310
|
|
4
|
2,002
|
7,200
|
|
5
|
1,537
|
5,480
|
|
6
|
1,098
|
690
|
|
7
|
1,062
|
82,430
|
|
8
|
929
|
2,400
|
|
9
|
923
|
18,320
|
|
10
|
699
|
4,920
|
a. Propose a straight-line model relating amount pledged (y) to net worth (x)
Choose the correct equation below
a. y = β0 + β1 + ∈
b. y = β1 + β0x
c. y = β0 + β1x
d. y = β1 + β0x + ∈
b. Fit the model to the data using the methods of least squares.
c. Graph the least squares line on a scatter gram of the data. Is there visual evidence of a linear relationship between the two variables? Is the relationship positive or negative?
Chose the correct graph below. Note that the axes of the greaphs are measured in millions of dollars
d. Interpret the estimates of the y-intercept and slope in the words of the problem.
Interpret the estimate of the y-intercept. Choose from the option below.
- They y-intercept is the average amount pledged.
- The y-intercept is the net worth of someone who pledged $0.
- The y-intercept is the amount pledged by someone with a net worth $0.
- The y-intercept has no meaning.
Interpret the estimate of the slope. Choose from the options below.
- The slope is the average net worth
- The slope is the amount that the net worth is estimated to increase for each unit increase in amount pledged
- The slope is the amount that the amount pledged is estimated to increase for each unit increase in net worth
- The slope has no meaning