Expenses, part 2.

Besides spending on leisure activities and food as given in Exercise 27, each household may also spend on loans, traveling costs, education, and other daily necessities. Two more expenses (loan and traveling cost)

have been added and a new scatter plot is presented below with the respective least squares regression lines fitted to each of the four expenditure groups.

a) What is the relationship between the percentage spend and the monthly expenditure of a household for the four kinds of expenses?

b) How does the expense on loans (the yellow line at the bottom)
differ from the expense on traveling (the green line above the yellow line)? Discuss both the slopes and the intercepts.

c) Suppose that the household with the most percentage spend (30.42%) on loans only has a monthly expenditure of $1.40 thousand. How might the least squares regression line of loans change?

Transcribed Image Text:

Expenditure ($ thousand) 3.90 3.40 2.90 2.40 1.90 1.40 0.90 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 Percentage Leisure (%) Food (%) Loans (%) Traveling (%)