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= 5). Bob White is conducting research on monthly expenses for medical care, including over the counter medicine. His dependent variable is monthly expenses for medical care (Y) while his independent variables are number of family members and insurance type (government funded, private insurance and other). He has coded insurance type as the following: X2 = 1 if private insurance, X3 = 1 if government funded. Below is his Excel output. (a) What is the prediction equation? (b) Based on the significance F-test, is this model a good prediction equation? Why? (c) What percent of the variation in medical expenses is explained by the independent variables? (d) Based on his model, what are the predicted monthly expenses for a family of four with private insurance? (e) Based on his model, what are the predicted monthly expenses for a family of two with government funded insurance? (f) Based on his model, what are the predicted monthly expenses for a family of five with no insurance? Below is his Excel output. Regression Statistics MultipleR 0.8590 R Square 0.7379 Adjusted 0.7182 Square Standard Error 952.3605 Observations 18 df Significance F 1.21E-07 ANOVA Regression Residual Total 3 14 17 SS MS F 1.32E+08 43977657 48.48745 12697866 906990.4 1.45E+08 Intercept X1 X2 X3 Coefficients Standard Error 1 Stat P-value 144.91 1025.911 0.141246 0.889688 11.63 1.247247 9.330762 2.19E-07 -13.70 8.786907 -1.55916 0.141272 -9.11 1.166068 7.810781 1.81E-06

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