In Exercise 1 we saw a regression based on a survey of households in a community served by a potential Estonian restaurant that might open. The regression model,

related the amount respondents said they spent individually to eat out each week to their household income in $1000’s.

a) A 95% prediction interval for a customer with a household income of $80,000 is ($35.60, $55.60). Explain to the restaurant owner how she should interpret this interval.

b) A 95% confidence interval for the mean amount spent weekly to eat out by people with a household income of $80,000 is ($40.60, $50.60). Explain to the restaurant owner how to interpret this interval.

c) Now explain to her why these intervals are different.

Transcribed Image Text:

= EatOut$/wk 17.28 +0.354 HHIncome