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Adjust for Different Slopes Using Interaction Terms in Multiple Regression

Question 5

Multiple Choice

Adjust for different slopes using interaction terms in multiple regression.
-A sample of 30 companies was randomly selected for a study investigating what
Factors affect the size of company bonuses. Data were collected on the number of
Employees at the company and whether or not the employees were unionized (1 = yes,
0 = no) . The following multiple regression model was fit to the data. Based on this
Model, what is the annual average bonus for a company with 5000 employees that are
Unionized?  Dependent Variable is Average Annual Bonus  Predictor  Coef  SE Coef  T  P  Constant 1241.0982.31.260.218 Employees 0.88720.13186.730.000 Union 525315793.330.003 Emp*Union 0.054240.020122.700.012\begin{array}{l}\text { Dependent Variable is Average Annual Bonus }\\\\\begin{array} { l r r r r } \text { Predictor } & \text { Coef } & \text { SE Coef } & \text { T } & \text { P } \\\text { Constant } & - 1241.0 & 982.3 & - 1.26 & 0.218 \\\text { Employees } & 0.8872 & 0.1318 & 6.73 & 0.000 \\\text { Union } & 5253 & 1579 & 3.33 & 0.003 \\\text { Emp*Union } & - 0.05424 & 0.02012 & - 2.70 & 0.012\end{array}\end{array}


A) $3195
B) $8176.80
C) $5253
D) $7980.25
E) $10,259.20

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