# Scatter diagram, coefficient of correlation & determination

1. The owner of Maumee Ford-Mercury wants to study the relationship between the age of a car and its selling price. Listed below is a random sample of 12 used cars sold at the dealership during the last year.

Car Age (years) Selling Price ($000) Car Age (years) Selling Price ($000)

1 9 8.1 7 8 7.6

2 7 6.0 8 11 8.0

3 11 3.6 9 10 8.0

4 12 4.0 10 12 6.0

5 8 5.0 11 6 8.6

6 7 10.0 12 6 8.0

1. If we want to estimate selling price on the basis of the age of the car, which variable is the dependent variable and which is the independent variable?

2. Draw a scatter diagram.

3. Determine the coefficient of correlation.

4 Determine the coefficient of determination.

5. Interpret these statistical measures. Does it surprise you that the relationship is inverse?

2. The city council of Pine Bluffs is considering increasing the number of police in an effort to reduce crime. Before making a final decision, the council asks the Chief of Police to survey other cities of similar size to determine the relationship between the number of police and the number of crimes reported. The Chief gathered the following sample information.

1. information.

City Police Number of Crimes City Police Number of Crimes

Oxford 15 17 Holgate 17 7

Starksville 17 13 Carey 12 21

Danville 25 5 Whistler 11 19

Athens 27 7 Woodville 22 6

1. If we want to estimate crimes on the basis of the number of police, which variable is the dependent variable and which is the independent variable?

1. Draw a scatter diagram.

2. Determine the coefficient of correlation.

3. Determine the coefficient of determination.

4. Interpret these statistical measures. Does it surprise you that the relationship is inverse?

https://brainmass.com/business/strategy-and-business-analysis/71980

#### Solution Summary

Solution contains Scatter diagram, coefficient of correlation,coefficient of determination, interpretation of these statistical measures.