Is There a Relationship Between the Raises Administrators at State $$E ( y ) = \beta _ { 0 } + \beta _ { 1 } x$$

question 108

Multiple Choice

Is there a relationship between the raises administrators at State University receive and their performance on the job?
A faculty group wants to determine whether job rating (x) is a useful linear predictor of raise (y) .
Consequently, the group considered the straight-line regression model $$E ( y ) = \beta _ { 0 } + \beta _ { 1 } x$$ Using the method of least squares, the faculty group obtained the following prediction equation: $$\hat { y } = 14,000 - 2,000 x$$ Interpret the estimated slope of the line.

• A) For an administrator with a rating of 1.0, we estimate his/her raise to be \(\$ 2,000\).
• B) For a 1-point increase in an administrator's rating, we estimate the administrator's raise to increase \(\$ 2,000\).
• C) For a 1-point increase in an administrator's rating, we estimate the administrator's raise to decrease \(\$ 2,000\).
• D) For a \(\$ 1\) increase in an administrator's raise, we estimate the administrator's rating to decrease 2,000 points.

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Unilateral Mistake

A situation in contract law where only one party holds an incorrect belief about a basic assumption on which a contract is based, potentially affecting the enforceability of the contract.

Mutual Mistake

A situation in a contract where all parties involved have a common but erroneous belief regarding a vital fact about the contract terms.

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