The Manager of a Human Resources Department Wishes to Predict $\text { Salary } = 40,000 + 2,500 \mathrm { x } + 1,500 \mathrm {~g} + 1,000 \mathrm { xg }$

question 15

Multiple Choice

The manager of a human resources department wishes to predict the salary of an employee based on years of experience,x,and gender,g.(g = 1 for a male employee and 0 for a female employee.) A random sample of 50 employees results in the following least-squares regression equation: $\text { Salary } = 40,000 + 2,500 \mathrm { x } + 1,500 \mathrm {~g} + 1,000 \mathrm { xg }$ Interpret the value of the coefficient of the interaction term xg.

• A)We predict that the growth rate of a male employee's salary will be $1,000 per year higher than that of a female employee.
• B)We predict that a man with 0 years of experience will make $1,000 more than a woman with 0 years of experience.
• C)We predict that the growth rate of a male employee's salary will be $1,000 per year.
• D)We predict that a woman with 0 years of experience will make $1,000 more than a man with 0 years of experience.
• E)We predict that the growth rate of a female employee's salary will be $1,000 per year.

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Definitions:

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more appealing to a specific target market.

Pure Monopoly

A market structure where a single supplier provides a unique product or service, facing no competition due to high barriers to entry.

State Utility Commission

A governmental body responsible for regulating the rates and services of utilities within a specific state.

Electric Power

The rate at which electrical energy is transferred by an electric circuit, typically measured in watts.