The following data are annual disposable income and total annual consumption for 12 families selected at a random from a large metropolitan area. Regard annual disposable income as the explanatory variable and total annual consumption as the dependent variable. From the regression of y on x, answer the questions that follow.
Annual Disposable Total Annual
Income ($) ( x) Consumption ($) ( y)
INC CONS
16,000 14,000
30,000 24,545
43,000 36,776
70,000 63,254
56,000 40,176
50,000 49,548
16,000 16,000
26,000 22,386
14,000 16,032
12,000 12,000
24,000 20,768
30,000 34,780
Calculate the following:
a.1. Slope ( b1)
2.. Y-Intercept (b0)
3. Cumulative Sum of Forecast Error (CFE)
4. Mean Square Error (MSE)
5. Standard Deviation
What is the sample regression equation relating sales to advertising?
If ADV increases by $ 1000, what would be the resulting change in your prediction of SALES?