Sample regression equation relating sales to advertising

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Reference no: EM132135126

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?

Reference no: EM132135126

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