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)
1 9 8.1
2 7 6
3 11 3.6
4 12 4
5 8 5
6 7 10
7 8 7.6
8 11 8
9 10 8
10 12 6
11 6 8.6
12 6 8
a. 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?
b. Draw a scatter diagram.
c. Determine the coefficient of correlation.
d. Determine the coefficient of determination.
e. Interpret these statistical measures. Does it surprise you that the relationship is inverse?
The solution explains the questions in a good amount of detail. It can be easily understood by anyone with a basic understanding of the concepts. The attachment to the solution does a good job of explaining in a very easy to understand way. The word document provides an Excel output with the regression equation. Graphs made in Excel are provided as well. Overall, a good response.