The estimation of the median income of black household and that of a white household in 2010 when the following model is based on data on the median incomes of Black and white households in the United States for the period 2000 − 2013 . z ( t , x ) = 39 , 300 − 430 t + 22400 x + 140 x t where z ( t , x ) = median household income , t = year ( t = 0 represents 2000 ) and x = { 0 if the income was for a black household 1 if the income was for a white household .
The estimation of the median income of black household and that of a white household in 2010 when the following model is based on data on the median incomes of Black and white households in the United States for the period 2000 − 2013 . z ( t , x ) = 39 , 300 − 430 t + 22400 x + 140 x t where z ( t , x ) = median household income , t = year ( t = 0 represents 2000 ) and x = { 0 if the income was for a black household 1 if the income was for a white household .
Solution Summary: The author explains how the following model is based on data on the median incomes of Black and white households in the United States for the period 2000-2013.
To calculate: The estimation of the median income of black household and that of a white household in 2010 when the following model is based on data on the median incomes of Black and white households in the United States for the period 2000−2013.
z(t,x)=39,300−430t+22400x+140xt where z(t,x)=median household income, t=year (t=0 represents 2000) and x={0 if the income was for a black household1 if the income was for a white household.
(b)
To determine
To calculate: How fast the median income for a Black household and white household is increasing in 2010 when the following model is based on data on the median incomes of Black and white households in the United States for the period 2000−2013.
z(t,x)=39,300−430t+22400x+140xt where z(t,x)=median household income, t=year (t=0 represents 2000) and x={0 if the income was for a black household1 if the income was for a white household.
(c)
To determine
Whether the answers in part (b) suggest that the income gap between white and Black households was widening or narrowing during the given period when the following model is based on data on the median incomes of Black and white households in the United States for the period 2000−2013.
z(t,x)=39,300−430t+22400x+140xt where z(t,x)=median household income, t=year (t=0 represents 2000) and x={0 if the income was for a black household1 if the income was for a white household.
(d)
To determine
What does the coefficient of xt in the formula for z(t,x) represent in terms of the income gap when the following model is based on data on the median incomes of Black and white households in the United States for the period 2000−2013.
z(t,x)=39,300−430t+22400x+140xt where z(t,x)=median household income, t=year (t=0 represents 2000) and x={0 if the income was for a black household1 if the income was for a white household.
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