Data are given below on the adjusted gross income x and the amount of itemized deductions taken by taxpayers. Data were reported in thousands of dollars. With the estimated regression equation = 4.68+.16x, the point estimate of a reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52.5 thousand is $13.08 thousand. Adjusted Gross Income ($1000s) 22 27 32 48 65 120 Reasonable Amount of Itemized Deductions ($1000s) 9.6 9.6 10.1 13.5 17.7 25.5 In the questions that follow, enter the dollar amounts requested. For example, if the regression results provide a value of 11.74 thousand, enter 11,740 as the dollar amount in the box. Use Table 1 of Appendix B. a. Develop a 95% confidence interval for the amount of total itemized deductions for all taxpayers with an adjusted gross income of $52,500 (to the nearest whole number). $( b. Develop a 95% prediction interval for the amount of total itemized deductions for a particular taxpayer with an adjusted gross income of $52,500 (to the nearest whole number). S( 7.0 c. If the particular taxpayer referred to in part (b) claimed total itemized deductions of $20,400, would the IRS agent's request for an audit appear to be justified? Select V d. Use your answer to part (b) to give the IRS agent a guideline as to the amount of itemized deductions that would suggest an audit for a taxpayer with an adjusted gross income of $52,500. Any deductions exceeding the upper limit of s could suggest an audit. Check My We