# Regression Analysis

One of the editors of a major automobile publication has collected data on 30 of the best-selling cars in the United States. The data are in a file called Automobiles( attached). suppose the magazine editor wishes to examine the relationship between price of the vehicle and the horsepower of the engine.

a) Toyota considered increasing the horsepower in its Camry motor by 10% (recall that the horsepower for the 1999 Camry was 133). Give advice on how much the cost of the automobile should increase based solely on the increase in horsepower. Provide a minimum and maximum amount of increase you would expect with a 90% probability.

b) The Buick Riviera has an engine with 240 horsepower. Construct a 95% interval estimate of the average price of the Riviera using its horsepower as the predictor. The suggested retail price of a (1999) Riviera is $33,820. does Buick appear to use something other than horsepower to determine its suggested retail price? Explain your reasoning.

c) The BMW Z3 roadster has an engine with 170 horsepower. Provide an estimate of the smallest and largest price you would expect to pay if you were to buy one of these vehicles.

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#### Solution Summary

One of the editors of a major automobile publication has collected data on 30 of the best-selling cars in the United States. The data are in a file called Automobiles( attached). suppose the magazine editor wishes to examine the relationship between price of the vehicle and the horsepower of the engine.

a) Toyota considered increasing the horsepower in its Camry motor by 10% (recall that the horsepower for the 1999 Camry was 133). Give advice on how much the cost of the automobile should increase based solely on the increase in horsepower. Provide a minimum and maximum amount of increase you would expect with a 90% probability.

b) The Buick Riviera has an engine with 240 horsepower. Construct a 95% interval estimate of the average price of the Riviera using its horsepower as the predictor. The suggested retail price of a (1999) Riviera is $33,820. does Buick appear to use something other than horsepower to determine its suggested retail price? Explain your reasoning.

c) The BMW Z3 roadster has an engine with 170 horsepower. Provide an estimate of the smallest and largest price you would expect to pay if you were to buy one of these vehicles.