A sociologist is looking at the relationship between consumption expenditures of families in the United States (Consumption in $), family income (Income in $), and whether or not the family lives in an urban or rural community (Urban = 1 if urban, 0 otherwise). She collects data on 50 families across the United States, a portion of which is shown in the accompanying table.

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Estimate: Consumption = ₀ + ₁Income + . Compute the predicted consumption expenditures of a family with income of $79,000.

Note: Round coefficient estimates to at least 4 decimal places and round final answer to the nearest whole number.

Predictive Consumption Expenditures:

Include a dummy variable, labeled Urban, with values 1 for urban and 0 otherwise, to predict consumption for a family with income of $79,000 in urban and rural communities.

Note: Round coefficient estimates to at least 4 decimal places and round final answer to the nearest whole number.

Urban Community Predictive Consumption:

Rural Community Predictive Consumption:

Include a dummy variable Urban and an interaction variable (Income Urban) to predict consumption for a family with income of $79,000 in urban and rural communities.

Note: Round coefficient estimates to at least 4 decimal places and round final answer to the nearest whole number.

Urban Community Predictive Consumption:

Rural Community Predictive Consumption:

Which of the preceding models is most suitable for the data?

Model 1, Model 2, or Model 3?

Since it has the highest or lowest?

Adjusted R Square Value or R Square Value?