Adjust for Different Slopes Using Interaction Terms in Multiple Regression

question 5

Multiple Choice

Adjust for different slopes using interaction terms in multiple regression.
-A sample of 30 companies was randomly selected for a study investigating what
Factors affect the size of company bonuses. Data were collected on the number of
Employees at the company and whether or not the employees were unionized (1 = yes,
0 = no) . The following multiple regression model was fit to the data. Based on this
Model, what is the annual average bonus for a company with 5000 employees that are
Unionized? $$\begin{array}{l}\text { Dependent Variable is Average Annual Bonus }\\\\\begin{array} { l r r r r } \text { Predictor } & \text { Coef } & \text { SE Coef } & \text { T } & \text { P } \\\text { Constant } & - 1241.0 & 982.3 & - 1.26 & 0.218 \\\text { Employees } & 0.8872 & 0.1318 & 6.73 & 0.000 \\\text { Union } & 5253 & 1579 & 3.33 & 0.003 \\\text { Emp*Union } & - 0.05424 & 0.02012 & - 2.70 & 0.012\end{array}\end{array}$$

• A) $3195
• B) $8176.80
• C) $5253
• D) $7980.25
• E) $10,259.20

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Definitions:

Vicariously Liable

A legal principle where one party is held responsible for the actions or omissions of another party, often used in employer-employee relations.

Wrongful Acts

Actions or behaviors that are illegal or morally incorrect according to societal norms.

Partnership Business

A sanctioned business model that entails a partnership between individuals, distributing both management roles and profit allocations.

Innocent Partner

A member of a partnership who is not aware of any wrongful behavior or fraudulent activity committed by their partner(s) within the business operations.