In: Statistics and Probability
The table below shows the average weekly wages (in dollars) for state government employees and federal government employees for 10 years. Construct and interpret a 95% prediction interval for the average weekly wages of federal government employees when the average weekly wages of state government employees is $899. The equation of the regression line is y= 1.438x - 37.254
Wages (state) X 731 766 787 822 853 892 928 932 960 983
Wages (federal) Y 1,008 1.065 1,112 1,135 1,198 1,230 1,283 1,310 1,332 1,395
Construct and interpret a 95% prediction interval for the average weekly wages of federal government employees when the average weekly wages of state government employees is $899. Select the correct choice below and fill in the answer boxes to complete your choice.
BASIC NOTATIONS AND FORMULAS USED TO CALCULATE PREDICTION INTERVAL FOR Y FOR SPECIFIC VALUES OF X:
Left Endpoint
Right Endpoint
Interval
GIVEN:
The equation of regression line y= 1.438x - 37.254
Sample size (n) = 10
Since sample size (n) = 10,
Degrees of freedom
The average weekly wages of state government employees is given to be $899.
Thus given the equation of regression line and , the point estimate is,
The t critical value with 8 degrees of freedom and 95% confidence level is .
STANDARD ERROR:
We know that
731 | 1008 | 1013.924 | -59.24 | 3509.3776 |
766 | 1065 | 1064.254 | 0.746 | 0.5565 |
787 | 1112 | 1094.452 | 17.548 | 307.9323 |
822 | 1135 | 1144.782 | -9.782 | 95.6875 |
853 | 1198 | 1189.36 | 8.64 | 74.6496 |
892 | 1230 | 1245.442 | -15.442 | 238.4554 |
928 | 1283 | 1297.21 | -14.21 | 201.9241 |
932 | 1310 | 1302.962 | 7.038 | 49.5334 |
960 | 1332 | 1343.226 | -11.226 | 126.0231 |
983 | 1395 | 1376.3 | 18.7 | 349.69 |
Using these values, the margin of error
Using and ,
Left Endpoint
Right Endpoint
Thus the 95% prediction interval for the average weekly wages of federal government employees when the average weekly wages of state government employees is $899 is given by,
Thus we are 95% confident that when the average weekly wages of state government employees is $899, the average weekly wages of federal government employees will be between and .