sas7a

Question 1

Assume you have noted the following prices for paperback books and the number of pages that each book contains.

Develop a least-squares estimated regression line.

1 Compute the coefficient of determination and explain its meaning.

2 Compute the correlation coefficient between the price and the number of pages. Test to see if x and y are related. Use α = 0.10.

Question 2

The following data represent a company's yearly sales volume and its advertising expenditure over a period of 8 years.

1 Develop a scatter diagram of sales versus advertising and explain what it shows regarding the relationship between sales and advertising.

2 Use the method of least squares to compute an estimated regression line between sales and advertising.

3 If the company's advertising expenditure is $400,000, what are the predicted sales? Give the answer in dollars.

4 What does the slope of the estimated regression line indicate?