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During inflationary times Mr Chavez has become budget conscious. Since his house is heated electrically, he has kept a record for the past year of his monthly electric bills and of the average month

During inflationary times, Mr. Chavez has become budget conscious. Since his house is heated electrically, he has kept a record for the past year of his monthly electric bills and of the average monthly outdoor temperature. The data are shown in the following table. Temperature is in degrees Celsius, and the electric bills are in dollars.

a. Assuming there is a linear relationship between the average monthly temperature and the monthly electric bill, determine the least-squares regression line for predicting the monthly electric bill from the average monthly temperature.

b. On the basis of the almanac forecast for this year, Mr. Chavez expects a colder winter. If February is 8 degrees colder this year, how much should Mr. Chavez allow in his budget for February’s electric bill? In calculating your answer, assume that the costs of electricity will rise 10% from last year’s costs because of inflation.

c. Calculate the standard error of estimate for predicting the monthly electric bill from average monthly temperature.

Month

Average Temp.

Elec. Bill ($)

Jan.

10

120

Feb.

18

90

Mar.

35

118

Apr.

39

60

May

50

81

Jun.

65

64

Jul.

75

26

Aug.

84

38

Sep.

52

50

Oct.

40

80

Nov.

25

100

Dec.

21

124

 

 

Aug 24 2020 Read more Less More

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