Abby Kratz, a Market Specialist at the Market Research Firm

Multiple Choice

Abby Kratz, a market specialist at the market research firm of Saez, Sikes, and Spitz, is analyzing household budget data collected by her firm.Abby's dependent variable is weekly household expenditures on groceries (in $'s) , and her independent variables are annual household income (in $1,000's) and household neighborhood (0 = suburban, 1 = rural) .Regression analysis of the data yielded the following table. $$\begin{array} { | l | r | r | r | r | } \hline & \text { Coefficients } & \text { Stardard Error } & t \text { Statistic } & p \text {-value } \\\hline \text { Irtercept } & 19.68247 & 10.01176 & 1.965934 & 0.077667 \\\hline x _ { 1 } \text { (incorne) } & 1.735272 & 0.174564 & 9.940612 & 1.68 \mathrm { E } - 06 \\\hline x _ { 2 } \text { (neighborhood) } & 49.12456 & 7.655776 & 6.416667 & 7.67 \mathrm { E } - 05 \\\hline\end{array}$$ For two households, one suburban and one rural, Abby's model predicts ________.

A) equal weekly expenditures for groceries
B) the suburban household's weekly expenditures for groceries will be $49 more
C) the rural household's weekly expenditures for groceries will be $49 more
D) the suburban household's weekly expenditures for groceries will be $8 more
E) the rural household's weekly expenditures for groceries will be $49 less