A consumer association was interested in building a regression model to explain the variation in automobile highway mileage. At one stage of the analysis, the estimate of the model took the following form:

yn = 34.20 - 0.003x1 + 4.56x2 where:

x1 = Vehicle weight x2 = e 1, if standard transmission 0, if automatic transmission

a. Interpret the regression coefficient for variable x1.

b. Interpret the regression coefficient for variable x2.

c. Present an estimate of a model that would predict the average EPA mileage rating for an automobile with standard transmission as a function of the vehicle’s weight.

d. Cadillac’s STS-V with automatic transmission weighs approximately 3,973 pounds. Provide an estimate of the average highway mileage you would expect to obtain from this model.

e. Discuss the effect of a dummy variable being incorporated in a regression equation like this one.

Use a graph if it is helpful.