A survey designed to study how much households spend on eating out finds the following regression model,
EatOut $> wk = 17.28 + 0.354
HH Income relating the amount respondents said they spent individually to eat out each week to their household income in $ 1000’s.
a) A 95% prediction interval for a customer with a house-hold income of $ 80,000 is ($ 35.60, $ 55.60). Explain to the restaurant owner how she should interpret this interval.
b) A 95% confidence interval for the mean amount spent weekly to eat out by people with a household income of $ 80,000 is ($ 40.60, $ 50.60). Explain to a restaurant owner how to interpret this interval.
c) Now explain to her why these intervals are different.