5. Suppose Bob conducts a survey of 100 college students gathering information o

Question

5. Suppose Bob conducts a survey of 100 college students gathering information on the volume of alcohol consumed by each college student surveyed. Bob tests the effect of the price of alcohol (measured as the price per shot) on alcohol consumption. Bob finds --3 and 10. a. In words, what does 0 mean? b. In words what does B1 mean? c. If the price of alcohol was $3 per shot, how much would the average college student drink? Suggest another independent variable to include in the regression. Suppose Pat is a big partier. At a price of $3 per shot Pat still buys 5 drinks. What is the value of , where | is the value of Pat's residual? Suppose Bob finds an adjusted R2-34. In words, what does.34 tell us about the model? d. e. f.

Explanation / Answer

We are allowed to do 4 subparts question at a time. Post again for more subparts of question.

a) So, equation is

Volume = 10 - 3 * Price

B0 = 10

It means, when price is zero, the volume consumed is still 10 liters or units.

b) B1 = -3

It means if the price rises by 1 unit, volume consumed declines by 3 units.

c) x = 3

Volume = 10 - 3 * 3

d) We can include the type of beer or how good the beer tastes.

Also, we can include, the income or the amount of money a student has.

Volume = 1

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