Question: In Wounded Knee, a suburb populated exclusively by Yuppies, everyone makes quite a lot of money and everyone jogs. It has been hypothesized that the more money a yuppie makes, the farther he or she jogs, and, in fact, a random sample of 12 yuppies yielded a correlation between income and distance-jogged of .85. In addition, in this sample, the income variable had a mean of 60 and a standard deviation of 5 (in thousands of dollars per year), and the distance variable had a mean of 15 and a standard deviation of 4 (in km. per day).

1. If Fred earns 1000 dollars more per year than Bill, how much farther would he be expected to jog each day?
2. Is this a significantly greater distance (α =.05)?
3. A large number of Wounded Knee residents earn $56,000 a year. On average, how far would these people be expected to jog each day and what are the 95% bounds on the error of this prediction?

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