Ch14 Simple Regression Solutions

Chapter 14
Simple Linear Regression

Learning Objectives
1.
Understand how regression analysis can be used to develop an equation that estimates
mathematically how two variables are related.
2.
Understand the differences between the regression model, the regression equation, and the estimated
regression equation.
3.
Know how to fit an estimated regression equation to a set of sample data based upon the leastsquares method.
4.
Be able to determine how good a fit is provided by the estimated regression equation and compute
the sample correlation coefficient from the regression analysis output.
5.
Understand the assumptions necessary for statistical inference and be able to test for a significant
relationship.
6.
Know how to develop confidence interval estimates of y given a specific value of x in both the case
of a mean value of y and an individual value of y.
7.
Learn how to use a residual plot to make a judgement as to the validity of the regression
assumptions, recognize outliers, and identify influential observations.
8.
Know the definition of the following terms:

independent and dependent variable
simple linear regression
regression model
regression equation and estimated regression equation
scatter diagram
coefficient of determination
standard error of the estimate
confidence interval
prediction interval
residual plot
standardized residual plot
outlier
influential observation
leverage
14 - 1
Chapter 14
Solutions:
a.
16
14
12
10
y
8
6
4
2
0
0
b.
There appears to be a linear relationship between x and y.
c.
Many different straight lines can be drawn to provide a linear approximation of the
relationship between x and y; in part d we will determine the equation of a straight line that
best represents the relationship according to the least squares criterion.
d.
Summations needed to compute the slope and y-intercept are:

xi = 15
b1 =
yi = 40
( xi x )( yi y ) = 26
( xi x )( yi y ) 26
=
= 2.6
( xi x ) 2
10
b0 = y b1 x = 8 (2.6)(3) = 0.2
y = 0.2 + 2.6 x
e.
y = 0.2 + 2.6(4) = 10.6
14 - 2
( xi x )2 = 10

a.
35
30
25
20
y
2.
15
10
5
0
0
10
b.
c.
d.

xi = 19
b1 =
yi = 116
( xi x )( yi y ) = 57.8
( xi x )( yi y ) 57.8
=
= 1.8766
( xi x ) 2
30.8
b0 = y b1 x = 23.2 ( 18766
.
)(38
. ) = 30.3311
y = 30.33 188
. x
e.
y = 30.33 188
. (6) = 19.05
14 - 3
( xi x ) 2 = 30.8
Chapter 14
3.
a.
7
6
5
4
3
2
1
0
0
b.

xi = 26
b1 =
yi = 17
( xi x )( yi y ) = 11.6
( xi x )( yi y ) 11.6
=
= 0.5088
( xi x ) 2
22.8
b0 = y b1 x = 3.4 (0.5088)(5.2) = 0.7542

y = 0.75 + 0.51x
c.
y = 0.75 + 0.51(4) = 2.79
14 - 4
( xi x ) 2 = 22.8
10

4. a.
135
130
125
y
120
115
110
105
100
61
62
63
64
65
66
67
68
69
b.
c.
d.

xi = 325
b1 =
yi = 585
( xi x )( yi y ) = 110
( xi x )( yi y ) 110
=
= 5.5
( xi x ) 2
20
b0 = y b1 x = 117 (5.5)(65) = 240.5

y = 240.5 + 55
. x
e.
y = 240.5 + 55
. x = 240.5 + 55
. (63) = 106 pounds
14 - 5
( xi x ) 2 = 20
There appe
Chapter 14
a.
2500
2000
Price ($)
5.
1500
1000
500
0
1
1.5
2.5
3.5
4.5
Baggage Capacity
b.
Let x = baggage capacity and y = price ($).

c.
relationship between x and y; in part (d) we will determine the equation of a straight line
that best represents the relationship according to the least squares criterion.
d.

xi = 29.5
b1 =
yi = 11,110
( xi x )( yi y ) = 2909.8889
( xi x ) 2 = 4.5556
( xi x )( yi y ) 2909.9889
=
= 638.7561
( xi x ) 2
4.5556
b0 = y b1 x = 1234.4444 (638.7561)(3.2778) = 859.26

y = 859.26 + 638.76 x
e.
A one point increase in the baggage capacity rating will increase the price by approximately $639.
f.
y = 859.26 + 638.76 x = 859.26 + 638.76(3) = $1057
14 - 6

a.
30
25
20
Bonus
6.
15
10
5
0
50.00
70.00
90.00
110.00
130.00
150.00
170.00
190.00
Salary
b.
Let x = salary and y = bonus.

c.

xi = 1420
b1 =
yi = 160
( xi x )( yi y ) = 1114
( xi x ) 2 = 6046
( xi x )( yi y ) 1114
=
= .18425
( xi x ) 2
6046
b0 = y b1 x = 16 (.18425)(142) = 10.16
y = 10.16 + .18 x
d.
$1000 increase in salary will increase the bonus by $180.
y = 10.16 + .18 x = 10.16 + .18(120) = 11.95 or approximately $12,000
14 - 7
Chapter 14
a.
1550
1500
1450
S&P
7.
1400
1350
1300
9600
9800
10000
10200
10400
10600
10800
11000
11200
DJIA
b.
Let x = DJIA and y = S&P. Summations needed to compute the slope and y-intercept are:
xi = 104,850
b1 =
yi = 14, 233
( xi x )( yi y ) = 268,921
( xi x ) 2 = 1,806,384
( xi x )( yi y )
268,921
=
= 0.14887
( xi x ) 2
1,806,384
b0 = y b1 x = 1423.3 (.14887)(10, 485) = 137.629

y = 137.63 + 0.1489 x
c.
y = 137.63 + 0.1489(11, 000) = 1500.27 or approximately 1500
14 - 8

a.
1800
1600
1400
1200
Price
8.
1000
800
600
400
200
0
0
Sidetrack Capability
b.
There appears to be a linear relationship between x = sidetrack capability and y = price, with higher
priced models having a higher level of handling.
c.

xi = 28
b1 =
yi = 10, 621
( xi x )( yi y ) = 4003.2
( xi x )( yi y ) 4003.2
=
= 204.2449
( xi x ) 2
19.6
b0 = y b1 x = 1062.1 (204.2449)(2.8) = 490.21

y = 490.21 + 204.24 x
d.
y = 490.21 + 204.24 x = 490.21 + 204.24(4) = 1307
14 - 9
( xi x ) 2 = 19.6
Chapter 14
a.
150
140
130
120
110
y
9.
100
90
80
70
60
50
0
b.
10

xi = 70
b1 =
yi = 1080
( xi x )( yi y ) = 568
( xi x )( yi y ) 568
=
=4
( xi x ) 2
142
b0 = y b1 x = 108 (4)(7) = 80
y = 80 + 4 x
c.
y = 80 + 4 x = 80 + 4(9) = 116
14 - 10
( xi x ) 2 = 142
12
14

10. a.
95
Overall Rating
90
85
80
75
70
65
60
100
150
200
250
Performance Score
b.
Let x = performance score and y = overall rating. Summations needed to compute the slope and yintercept are:
xi = 2752
b1 =
yi = 1177
( xi x )( yi y ) = 1723.73
( xi x )( yi y )
1723.73
=
= 0.1452
2
( xi x )
11,867.73
b0 = y b1 x = 78.4667 (.1452)(183.4667) = 51.82

y = 51.82 + 0.145 x
c.
y = 51.82 + 0.145(225) = 84.4 or approximately 84
14 - 11
( xi x ) 2 = 11,867.73
Chapter 14
11. a.
35
Departures (%)
30
25
20
15
10
5
0
10
15
20
25
30
35
Arrivals (%)
b.
There appears to be a linear relationship between the variables.
c.
Let x = percentage of late arrivals and y = percentage of late departures.

The summations needed to compute the slope and the y-intercept are:
xi = 273
b1 =
yi = 265
( xi x )( yi y ) = 101
( xi x ) 2 = 114.4
( xi x )( yi y )
101
=
= .8829
( xi x ) 2
114.4
b0 = y b1 x = 21 (.8829)(21.4) = 2.106
y = 2.106 + .883 x
d.
A one percent increase in the percentage of late arrivals will increase the percentage of late arrivals
by .88 or slightly less than one percent.
e.
y = 2.106 + .883 x = 2.106 + .883(22) = 21.53%
14 - 12

12. a.
40000
35000
Revenue
30000
25000
20000
15000
10000
5000
0
0
20000
40000
60000
80000
100000
Number of Employees
b.
There appears to be a positive linear relationship between the number of employees and the revenue.
c.
Let x = number of employees and y = revenue. Summations needed to compute the slope and yintercept are:
xi = 4200
b1 =
yi = 1669
( xi x )( yi y ) = 4, 658,594,168
( xi x )( yi y ) 4, 658,594,168
=
= 0.316516
( xi x ) 2
14, 718,343,803
b0 = y b1 x = 14, 048 (.316516)(40, 299) = 1293

y = 1293 + 0.3165 x
d.
y = 1293 + .3165(75, 000) = 25, 031
14 - 13
( xi x ) 2 = 14, 718,343,803
Chapter 14
13. a.
30.0
25.0
20.0
15.0
10.0
5.0
0.0
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
b.
xi = 399
b1 =
yi = 97.1
( xi x )( yi y ) = 1233.7
( xi x ) 2 = 7648
( xi x )( yi y ) 1233.7
=
= 0.16131
( xi x ) 2
7648
b0 = y b1 x = 1387143
.
(016131
.
)(57) = 4.67675
y = 4.68 + 016
. x
c.
y = 4.68 + 016
. x = 4.68 + 016
. (52.5) = 13.08 or approximately $13,080.
The agent's request for an audit appears to be justified.
14 - 14
Salary
14. a.
30.0
29.0
28.0
27.0
26.0
25.0
24.0
23.0
22.0
21.0
20.0
0.00
20.00
40.00
60.00
80.00
100.00
Index
b.
Let x = cost of living index and y = starting salary ($1000s)

xi = 369.16
b1 =
yi = 267.7
( xi x )( yi y ) = 311.9592
( xi x ) 2 = 7520.4042
( xi x )( yi y ) 311.9592
=
= .0415
( xi x ) 2
7520.4042
b0 = y b1 x = 26.77 ( .0415)(36.916) = 28.30

y = 28.30 .0415 x
c.
15. a.
y = 28.30 .0415 x = 28.30 .0415(50) = 26.2
The estimated regression equation and the mean for the dependent variable are:
yi = 0.2 + 2.6 xi
y =8
The sum of squares due to error and the total sum of squares are
SSE = ( yi yi ) 2 = 12.40
SST = ( yi y ) 2 = 80
Thus, SSR = SST - SSE = 80 - 12.4 = 67.6

b.
r2 = SSR/SST = 67.6/80 = .845

The least squares line provided a very good fit; 84.5% of the variability in y has been explained by
the least squares line.
c.
r = .845 = +.9192
14 - 15
Chapter 14
16. a.
y i = 30.33 1.88 x
y = 23.2
SSE = ( yi yi ) 2 = 6.33
SST = ( yi y ) 2 = 114.80
Thus, SSR = SST - SSE = 114.80 - 6.33 = 108.47

b.
r2 = SSR/SST = 108.47/114.80 = .945

The least squares line provided an excellent fit; 94.5% of the variability in y has been explained by
the estimated regression equation.
c.
r = .945 = .9721
Note: the sign for r is negative because the slope of the estimated regression equation is negative.
(b1 = -1.88)
17.
y i = .75 + .51x
y = 3.4
SSE = ( yi y i ) 2 = 5.3
SST = ( yi y ) 2 = 11.2
Thus, SSR = SST - SSE = 11.2 - 5.3 = 5.9

r2 = SSR/SST = 5.9/11.2 = .527
We see that 52.7% of the variability in y has been explained by the least squares line.
r = .527 = +.7259
18. a.
y = 1790.5 + 581.1x
y = 3650
SSE = ( yi yi ) 2 = 85,135.14
SST = ( yi y ) 2 = 335, 000
Thus, SSR = SST - SSE = 335,000 - 85,135.14 = 249,864.86

b.
r2 = SSR/SST = 249,864.86/335,000 = .746

We see that 74.6% of the variability in y has been explained by the least squares line.
c.
r = .746 = +.8637
14 - 16

19. a.
y = 137.63 + .1489 x
y = 1423.3
SSE = ( yi yi ) 2 = 7547.14
SST = ( yi y ) 2 = 47,582.10
Thus, SSR = SST - SSE = 47,582.10 - 7547.14 = 40,034.96

b.
r2 = SSR/SST = 40,034.96/47,582.10 = .84

We see that 84% of the variability in y has been explained by the least squares line.
c.
20. a.
r = .84 = +.92
Let x = income and y = home price. Summations needed to compute the slope and y-intercept are:
xi = 1424
b1 =
yi = 2455.5
( xi x )( yi y ) = 4011
( xi x ) 2 = 1719.618
( xi x )( yi y )
4011
=
= 2.3325
2
( xi x )
1719.618
b0 = y b1 x = 136.4167 (2.3325)(79.1111) = 48.11

y = 48.11 + 2.3325 x
b.
SSE = ( yi y i ) 2 = 2017.37
SST = ( yi y ) 2 = 11,373.09
Thus, SSR = SST - SSE = 11,373.09 2017.37 = 9355.72

r2 = SSR/SST = 9355.72/11,373.09 = .82
We see that 82% of the variability in y has been explained by the least squares line.
r = .82 = +.91
c.
21. a.
y = 48.11 + 2.3325(95) = 173.5 or approximately $173,500
The summations needed in this problem are:

xi = 3450
b1 =
yi = 33, 700
( xi x )( yi y ) = 712,500
( xi x )( yi y ) 712,500
=
= 7.6
( xi x ) 2
93, 750
14 - 17
( xi x ) 2 = 93, 750
Chapter 14
b0 = y b1 x = 5616.67 (7.6)(575) = 1246.67
y = 1246.67 + 7.6 x
b.
$7.60
c.
The sum of squares due to error and the total sum of squares are:
SSE = ( yi y i ) 2 = 233,333.33
SST = ( yi y ) 2 = 5, 648,333.33
Thus, SSR = SST - SSE = 5,648,333.33 - 233,333.33 = 5,415,000

r2 = SSR/SST = 5,415,000/5,648,333.33 = .9587
We see that 95.87% of the variability in y has been explained by the estimated regression equation.
d.
22. a.
y = 1246.67 + 7.6 x = 1246.67 + 7.6(500) = $5046.67
Let x = speed (ppm) and y = price ($)

The summations needed in this problem are:
xi = 149.9
b1 =
yi = 10, 221
( xi x )( yi y ) = 34,359.81
( xi x )2 = 291.389
( xi x )( yi y ) 34,359.81
=
= 117.9173
( xi x ) 2
291.389
b0 = y b1 x = 1022.1 (117.9173)(14.99) = 745.80

y = 745.80 + 117.917 x
b.
The sum of squares due to error and the total sum of squares are:
SSE = ( yi y i ) 2 = 1, 678, 294
SST = ( yi y ) 2 = 5, 729,911
Thus, SSR = SST - SSE = 5,729,911 - 1,678,294 = 4,051,617

r2 = SSR/SST = 4,051,617/5,729,911 = 0.7071
Approximately 71% of the variability in price is explained by the speed.
c.
r = .7071 = +.84
It reflects a linear relationship that is between weak and strong.

23. a.
b.
s2 = MSE = SSE / (n - 2) = 12.4 / 3 = 4.133

s = MSE = 4.133 = 2.033
14 - 18
c.
( xi x ) 2 = 10
sb1 =
d.
t=
( xi x )
2.033
10
= 0.643
b1
2.6
=
= 4.04
sb1 .643
Using t table (3 degrees of freedom), area in tail is between .01 and .025
p-value is between .02 and .05
Actual p-value = .0272
Because p-value , we reject H0: 1 = 0
e.
MSR = SSR / 1 = 67.6

F = MSR / MSE = 67.6 / 4.133 = 16.36
Using F table (1 degree of freedom numerator and 3 denominator), p-value is between .025 and .05
Source of Variation
Regression
Error
Total
24. a.
Sum of Squares
67.6
12.4
80.0
Mean Square
67.6
4.133
F
16.36
s2 = MSE = SSE / (n - 2) = 6.33 / 3 = 2.11
b.
s = MSE = 2.11 = 1453

.
c.
( xi x ) 2 = 30.8
sb1 =
d.
Degrees of Freedom
1
3
4
t=
( xi x )
1.453
30.8
= 0.262
b1 188
.
=
= 7.18
.262
sb1
Using t table (3 degrees of freedom), area in tail is less than .005; p-value is less than .01
e.
MSR = SSR / 1 = 8.47
14 - 19
Chapter 14
F = MSR / MSE = 108.47 / 2.11 = 51.41

Using F table (1 degree of freedom numerator and 3 denominator), p-value is less than .01
Source of Variation
Regression
Error
Total
25. a.
Sum of Squares
108.47
6.33
114.80
Degrees of Freedom
1
3
4
Mean Square
108.47
2.11
F
51.41
s2 = MSE = SSE / (n - 2) = 5.30 / 3 = 1.77

s = MSE = 177
. = 133
.
b.
( xi x ) 2 = 22.8
sb1 =
t=
( xi x )
1.33
22.8
= 0.28
b1 .51
.
=
= 182
sb1 .28
Because p-value > , we cannot reject H0: 1 = 0; x and y do not appear to be related.
c.
MSR = SSR/1 = 5.90 /1 = 5.90

F = MSR/MSE = 5.90/1.77 = 3.33
Using F table (1 degree of freedom numerator and 3 denominator), p-value is greater than .10
Because p-value > , we cannot reject H0: 1 = 0; x and y do not appear to be related.
26. a.
s2 = MSE = SSE / (n - 2) = 85,135.14 / 4 = 21,283.79

s = MSE = 21,283.79 = 14589
.
( xi x ) 2 = 0.74
14 - 20
sb1 =
t=
s
( xi x )
145.89
0.74
= 169.59
b1 58108
.
=
= 3.43
sb1 169.59
b.
MSR = SSR / 1 = 249,864.86 / 1 = 249.864.86

F = MSR / MSE = 249,864.86 / 21,283.79 = 11.74
c.
Source of Variation
Regression
Error
Total
27. a.
Sum of Squares
249864.86
85135.14
335000
Degrees of Freedom
1
4
5

xi = 37
b1 =
yi = 1654
( xi x )( yi y ) = 315.2
( xi x ) 2 = 10.1
( xi x )( yi y ) 315.2
=
= 31.2079
( xi x ) 2
10.1
b0 = y b1 x = 165.4 (31.2079)(3.7) = 19.93

y = 19.93 + 31.21x
b.
Mean Square
249864.86
21283.79
SSE = ( yi y i ) 2 = 2487.66 SST = ( yi y ) 2 = 12,324.4

Thus, SSR = SST - SSE = 12,324.4 - 2487.66 = 9836.74
MSR = SSR/1 = 9836.74
MSE = SSE/(n - 2) = 2487.66/8 = 310.96
F = MSR / MSE = 9836.74/310.96 = 31.63
F.05 = 5.32 (1 degree of freedom numerator and 8 denominator)
14 - 21
F
11.74
Chapter 14
Since F = 31.63 > F.05 = 5.32 we reject H0: 1 = 0.
Upper support and price are related.
c.
r2 = SSR/SST = 9,836.74/12,324.4 = .80

The estimated regression equation provided a good fit; we should feel comfortable using the
estimated regression equation to estimate the price given the upper support rating.
d.
28.
y = 19.93 + 31.21(4) = 144.77
SST = 411.73 SSE = 161.37 SSR = 250.36

MSR = SSR / 1 = 250.36
MSE = SSE / (n - 2) = 161.37 / 13 = 12.413
F = MSR / MSE = 250.36 / 12.413= 20.17
Because p-value , we reject H0: 1 = 0.
29.
SSE = 233,333.33 SST = 5,648,333.33 SSR = 5,415,000

MSE = SSE/(n - 2) = 233,333.33/(6 - 2) = 58,333.33
MSR = SSR/1 = 5,415,000
F = MSR / MSE = 5,415,000 / 58,333.25 = 92.83
Source of Variation
Regression
Error
Total
Sum of Squares
5,415,000.00
233,333.33
5,648,333.33
Degrees of Freedom
1
4
5
Mean Square
5,415,000
58,333.33
F
92.83
Because p-value , we reject H0: 1 = 0. Production volume and total cost are related.
30.
Using the computations from Exercise 22,

SSE = 1,678,294 SST = 5,729,911 SSR = 4,051,617
s2 = MSE = SSE/(n-2) = 1,678,294/8 = 209,786.8
s = 209, 786.8 = 458.02
( xi x ) 2 = 291.389
14 - 22
sb1 =
t=
s
( xi x )
458.02
291.389
= 26.832
b1 117.9173
=
= 4.395
26.832
sb1
Using t table (1 degree of freedom numerator and 8 denominator), area in tail is less than .005
p-value is less than .01
There is a significant relationship between x and y.
31.
SST = 11,373.09 SSE = 2017.37 SSR = 9355.72

MSR = SSR / 1 = 9355.72
MSE = SSE / (n - 2) = 2017.37/ 16 = 126.0856
F = MSR / MSE = 9355.72/ 126.0856 = 74.20
Because p-value , we reject H0: 1 = 0.
32. a.
b.
s = 2.033
x =3
( xi x ) 2 = 10
s yp = s
2
1 ( xp x )
1 (4 3) 2
+
= 2.033 +
= 1.11
2
n ( xi x )
5
10
y = 0.2 + 2.6 x = 0.2 + 2.6(4) = 10.6

y p t / 2 s y p
10.6 3.182 (1.11) = 10.6 3.53

or 7.07 to 14.13
c.
sind = s 1 +
2
1 ( xp x )
1 (4 3) 2
2.033
1
+
=
+
+
= 2.32
n ( xi x ) 2
5
10
14 - 23
Chapter 14
d.
y p t / 2 sind
10.6 3.182 (2.32) = 10.6 7.38

or 3.22 to 17.98
33. a.
b.
s = 1.453
x = 3.8
s yp = s
( xi x ) 2 = 30.8
2
1 ( xp x )
1 (3 3.8) 2
+
= 1.453 +
= .068
2
n ( xi x )
5
30.8
y = 30.33 188
. x = 30.33 188
. (3) = 24.69
y p t / 2 s y p
24.69 3.182 (.68) = 24.69 2.16

or 22.53 to 26.85
c.
sind = s 1 +
d.
y p t / 2 sind
2
1 ( xp x )
1 (3 3.8) 2
1.453
1
+
=
+
+
= 1.61
n ( xi x ) 2
5
30.8
24.69 3.182 (1.61) = 24.69 5.12

or 19.57 to 29.81
34.
s = 1.33
x = 5.2
s yp = s
( xi x ) 2 = 22.8
2
1 ( xp x )
1 (3 5.2) 2
+
=
1.33
+
= 0.85
n ( xi x ) 2
5
22.8
y = 0.75 + 0.51x = 0.75 + 0.51(3) = 2.28

y p t / 2 s y p
2.28 3.182 (.85) = 2.28 2.70

or -.40 to 4.98
14 - 24
sind = s 1 +
2
1 ( xp x )
1 (3 5.2) 2
+
=
1.33
1
+
+
= 1.58
n ( xi x ) 2
5
22.8
y p t / 2 sind
2.28 3.182 (1.58) = 2.28 5.03

or -2.27 to 7.31
35. a.
s = 145.89
x = 3.2
s yp = s
( xi x ) 2 = 0.74
2
1 ( xp x )
1 (3 3.2) 2
+
=
145.89
+
= 68.54
n ( xi x ) 2
6
0.74
y = 1790.5 + 581.1x = 1790.5 + 581.1(3) = 3533.8

y p t / 2 s y p
3533.8 2.776 (68.54) = 3533.8 190.27

or $3343.53 to $3724.07
b.
sind = s 1 +
2
1 ( xp x )
1 (3 3.2) 2
+
= 145.89 1 + +
= 161.19
2
n ( xi x )
6
0.74
y p t / 2 sind
3533.8 2.776 (161.19) = 3533.8 447.46

or $3086.34 to $3981.26
36. a.
b.
y = 51.82 + .1452 x = 51.82 + .1452(200) = 80.86
s = 3.5232
x = 183.4667
s yp = s
( xi x ) 2 = 11,867.73
2
1 ( xp x )
1 (200 183.4667) 2
+
= 3.5232
+
= 1.055
2
n ( xi x )
15
11,867.73
y p t / 2 s y p
80.86 2.160 (1.055) = 80.86 2.279

or 78.58 to 83.14
14 - 25
Chapter 14
c.
sind = s 1 +
2
1 ( xp x )
1 (200 183.4667) 2
+
=
3.5232
1
+
+
= 3.678
n ( xi x ) 2
15
11,867.73
y p t / 2 sind
80.86 2.160 (3.678) = 80.86 7.944

or 72.92 to 88.80
37. a.
x = 57
( xi x ) 2 = 7648
s2 = 1.88
s yp = s
s = 1.37
2
1 ( xp x )
1 (52.5 57) 2
+
=
1.37
+
= 0.52
n ( xi x ) 2
7
7648
y p t / 2 s y p
13.08 2.571 (.52) = 13.08 1.34

or 11.74 to 14.42 or $11,740 to $14,420
b.
sind = 1.47
13.08 2.571 (1.47) = 13.08 3.78
or 9.30 to 16.86 or $9,300 to $16,860
c.
Yes, $20,400 is much larger than anticipated.
d.
Any deductions exceeding the $16,860 upper limit could suggest an audit.
38. a.
b.
y = 1246.67 + 7.6(500) = $5046.67

x = 575
( xi x ) 2 = 93, 750
s2 = MSE = 58,333.33 s = 241.52

sind = s 1 +
2
1 ( xp x )
1 (500 575) 2
+
= 241.52 1 + +
= 267.50
2
n ( xi x )
6
93, 750
y p t / 2 sind
5046.67 4.604 (267.50) = 5046.67 1231.57

or $3815.10 to $6278.24
c.
Based on one month, $6000 is not out of line since $3815.10 to $6278.24 is the prediction interval.
However, a sequence of five to seven months with consistently high costs should cause concern.
14 - 26

39. a.
Let x = miles of track and y = weekday ridership in thousands.

xi = 203
b1 =
yi = 309
( xi x )( yi y ) = 1471
( xi x ) 2 = 838
( xi x )( yi y ) 1471
=
= 1.7554
838
( xi x ) 2
b0 = y b1 x = 44.1429 (1.7554)(29) = 6.76

y = 6.76 + 1.755 x
b.
SST =3620.9 SSE = 1038.7 SSR = 2582.1

r2 = SSR/SST = 2582.1/3620.9 = .713
The estimated regression equation explained 71.3% of the variability in y; a good fit.
c.
s2 = MSE = 1038.7/5 = 207.7

s = 207.7 = 14.41
s yp = s
2
1 ( xp x )
1 (30 29) 2
+
= 14.41 +
= 5.47
2
n ( xi x )
7
838
y = 6.76 + 1.755 x = 6.76 + 1.755(30) = 45.9

y p t / 2 s y p
45.9 2.571(5.47) = 45.9 14.1

or 31.8 to 60
d.
sind = s 1 +
2
1 ( xp x )
1 (30 29) 2
14.41
1
+
=
+
+
= 15.41
n ( xi x ) 2
7
838
y p t / 2 sind
45.9 2.571(15.41) = 45.9 39.6

or 6.3 to 85.5
The prediction interval is so wide that it would not be of much value in the planning process. A
larger data set would be beneficial.
40. a.
b.
c.
9
y = 20.0 + 7.21x
1.3626
14 - 27
Chapter 14
d.
SSE = SST - SSR = 51,984.1 - 41,587.3 = 10,396.8

MSE = 10,396.8/7 = 1,485.3
F = MSR / MSE = 41,587.3 /1,485.3 = 28.00
Because p-value , we reject H0: B1 = 0.
e.
41. a.
b.
y = 20.0 + 7.21(50) = 380.5 or $380,500

y = 6.1092 + .8951x
t=
b1 B1 .8951 0
=
= 6.01
sb1
.149
Using t table (1 degree of freedom numerator and 8 denominator), area in tail is less than .005
p-value is less than .01
Because p-value , we reject H0: B1 = 0
c.
42 a.
y = 6.1092 + .8951(25) = 28.49 or $28.49 per month

y = 80.0 + 50.0x
b.
30
c.
F = MSR / MSE = 6828.6/82.1 = 83.17

Because p-value < = .05, we reject H0: B1 = 0.
Branch office sales are related to the salespersons.
d.
y = 80 + 50 (12) = 680 or $680,000
43. a.
The Minitab output is shown below:
14 - 28
The regression equation is

Price = 4.98 + 2.94 Weight
Predictor
Constant
Weight
Coef
4.979
2.9370
S = 8.457
SE Coef
3.380
0.2934
R-Sq = 80.7%
T
1.47
10.01
P
0.154
0.000
R-Sq(adj) = 79.9%
Analysis of Variance
Source
Regression
Residual Error
Total
DF
1
24
25
SS
7167.9
1716.6
8884.5
MS
7167.9
71.5
F
100.22
P
0.000
Predicted Values for New Observations

New Obs
1
Fit
SE Fit
34.35
1.66
95.0% CI
30.93,
b.
The p-value = .000 < = .05 (t or F); significant relationship
c.
r2 = .807. The least squares line provided a very good fit.
d.
The 95% confidence interval is 30.93 to 37.77.
e.
The 95% prediction interval is 16.56 to 52.14.
95.0% PI
16.56,
37.77)
52.14)
44. a/b. The scatter diagram shows a linear relationship between the two variables.
c.

Rental$ = 37.1 - 0.779 Vacancy%
Predictor
Constant
Vacancy%
Coef
37.066
-0.7791
S = 4.889
SE Coef
3.530
0.2226
R-Sq = 43.4%
T
10.50
-3.50
P
0.000
0.003
R-Sq(adj) = 39.8%
Source
Regression
Residual Error
Total
DF
1
16
17
SS
292.89
382.37
675.26
MS
292.89
23.90
F
12.26
P
0.003

New Obs
1
2
Fit
17.59
28.26
SE Fit
2.51
1.42
95.0% CI
( 12.27,
22.90)
( 25.26,
31.26)
Values of Predictors for New Observations
14 - 29
(
(
95.0% PI
5.94,
29.23)
17.47,
39.05)
Chapter 14
New Obs
1
2
Vacancy%
25.0
11.3
d.
Since the p-value = 0.003 is less than = .05, the relationship is significant.
e.
r2 = .434. The least squares line does not provide a very good fit.
f.
The 95% confidence interval is 12.27 to 22.90 or $12.27 to $22.90.
g.
The 95% prediction interval is 17.47 to 39.05 or $17.47 to $39.05.
45. a.
xi = 70
b1 =
yi = 76
( xi x )( yi y ) = 200
( xi x ) 2 = 126
( xi x )( yi y ) 200
=
= 1.5873
126
( xi x ) 2
b0 = y b1 x = 15.2 (1.5873)(14) = 7.0222

y = 7.02 + 1.59 x
b.
The residuals are 3.48, -2.47, -4.83, -1.6, and 5.22
c.
6
Residuals
4
2
0
-2
-4
-6
0
10
15
20
25
With only 5 observations it is difficult to determine if the assumptions are satisfied.

However, the plot does suggest curvature in the residuals that would indicate that the error
term assumptions are not satisfied. The scatter diagram for these data also indicates that the
underlying relationship between x and y may be curvilinear.
d.
s 2 = 23.78
hi =
1 ( xi x ) 2
1 ( xi 14) 2
+
=
+
n ( xi x ) 2 5
126
The standardized residuals are 1.32, -.59, -1.11, -.40, 1.49.
14 - 30

e.
46. a.
The standardized residual plot has the same shape as the original residual plot. The
curvature observed indicates that the assumptions regarding the error term may not be
satisfied.
y = 2.32 + .64 x
b.
4
3
Residuals
2
1
0
-1
-2
-3
-4
0
10
The assumption that the variance is the same for all values of x is questionable. The variance appears
to increase for larger values of x.
47. a.
Let x = advertising expenditures and y = revenue

y = 29.4 + 1.55 x
b.
SST = 1002 SSE = 310.28 SSR = 691.72

MSR = SSR / 1 = 691.72
MSE = SSE / (n - 2) = 310.28/ 5 = 62.0554
F = MSR / MSE = 691.72/ 62.0554= 11.15
Because p-value = .05, we conclude that the two variables are related.
14 - 31
Chapter 14
c.
10
Residuals
5
0
-5
-10
-15
25
35
45
55
65
Predicted Values
d.
48. a.
The residual plot leads us to question the assumption of a linear relationship between x and y. Even
though the relationship is significant at the .05 level of significance, it would be extremely
dangerous to extrapolate beyond the range of the data.
y = 80 + 4 x
8
6
Residuals
4
2
0
-2
-4
-6
-8
0
10
b.
49. a.
The assumptions concerning the error term appear reasonable.

Let x = return on investment (ROE) and y = price/earnings (P/E) ratio.
y = 32.13 + 3.22 x
14 - 32
12
14

b.
Standardized Residuals
2
1.5
1
0.5
0
-0.5
-1
-1.5
0
10
20
30
40
50
60
c.
50. a.
There is an unusual trend in the residuals. The assumptions concerning the error term appear
questionable.
The MINITAB output is shown below:
Y = 66.1 + 0.402 X
Predictor
Constant
X
S = 12.62
Coef
66.10
0.4023
SE Coef
32.06
0.2276
R-sq = 38.5%
T
2.06
1.77
p
0.094
0.137
R-sq(adj) = 26.1%
SOURCE
DF
Regression
1
Residual Error 5
Total
6
SS
497.2
795.7
1292.9
Unusual Observations
Obs.
X
Y
1
135
145.00
Fit
120.42
MS
497.2
159.1
SEFit
4.87
F
3.12
Residual
24.58
p
0.137
St.Resid
2.11R
R denotes an observation with a large standardized residual.

The standardized residuals are: 2.11, -1.08, .14, -.38, -.78, -.04, -.41
The first observation appears to be an outlier since it has a large standardized residual.
b.
14 - 33
Chapter 14
2.4+
STDRESID1.2+
0.0+
-1.2+
-
*
*
*
*
*
--+---------+---------+---------+---------+---------+----YHAT
110.0
115.0
120.0
125.0
130.0
135.0
The standardized residual plot indicates that the observation x = 135, y = 145 may be an outlier;
note that this observation has a standardized residual of 2.11.
c.
The scatter diagram is shown below

*
135+
*
*
120+
*
*
*
105+
*
----+---------+---------+---------+---------+---------+--X
105
120
135
150
165
180
The scatter diagram also indicates that the observation x = 135, y = 145 may be an outlier; the
implication is that for simple linear regression an outlier can be identified by looking at the scatter
diagram.
51. a.

Y = 13.0 + 0.425 X
14 - 34
Predictor
Constant
X
S = 3.181
Coef
13.002
0.4248
SE Coef
2.396
0.2116
R-sq = 40.2%
T
5.43
2.01
p
0.002
0.091
R-sq(adj) = 30.2%
SOURCE
DF
Regression
1
Residual Error 6
Total
7
SS
40.78
60.72
101.50
Obs.
X
Y
7
12.0
24.00
8
22.0
19.00
MS
40.78
10.12
Fit Stdev.Fit
18.10
1.20
22.35
2.78
F
4.03
Residual
5.90
-3.35
p
0.091
St.Resid
2.00R
-2.16RX
R denotes an observation with a large standardized residual.

X denotes an observation whose X value gives it large influence.
The standardized residuals are: -1.00, -.41, .01, -.48, .25, .65, -2.00, -2.16
The last two observations in the data set appear to be outliers since the standardized residuals for
these observations are 2.00 and -2.16, respectively.
b.
Using MINITAB, we obtained the following leverage values:

.28, .24, .16, .14, .13, .14, .14, .76
MINITAB identifies an observation as having high leverage if hi > 6/n; for these data, 6/n =
6/8 = .75. Since the leverage for the observation x = 22, y = 19 is .76, MINITAB would
identify observation 8 as a high leverage point. Thus, we conclude that observation 8 is an
influential observation.
c.
Y
24.0+
-
14 - 35
Chapter 14
20.0+
16.0+
12.0+
-
*
*
*
*
*
*
*
+---------+---------+---------+---------+---------+------X
0.0
5.0
10.0
15.0
20.0
25.0
The scatter diagram indicates that the observation x = 22, y = 19 is an influential observation.
52. a.

Amount = 4.09 + 0.196 MediaExp
Predictor
Constant
MediaExp
Coef
4.089
0.19552
S = 5.044
SE Coef
2.168
0.03635
R-Sq = 78.3%
T
1.89
5.38
P
0.096
0.001
R-Sq(adj) = 75.6%
Source
Regression
Residual Error
Total
DF
1
8
9
SS
735.84
203.51
939.35
Obs
MediaExp
Amount
1
120
36.30
Fit
27.55
MS
735.84
25.44
F
28.93
SE Fit
3.30
Residual
8.75
P
0.001
St Resid
2.30R
R denotes an observation with a large standardized residual

b.
53. a.
Minitab identifies observation 1 as having a large standardized residual; thus, we would consider
observation 1 to be an outlier.
Price = 28.0 + 0.173 Volume
Predictor
Constant
Volume
S = 17.53
Coef
27.958
0.17289
SE Coef
4.521
0.07804
R-Sq = 17.0%
T
6.18
2.22
P
0.000
0.036
R-Sq(adj) = 13.5%
Source
Regression
Residual Error
DF
1
24
SS
1508.4
7376.1
14 - 36
MS
1508.4
307.3
F
4.91
P
0.036
Total
25
8884.5
Obs
Volume
Price
22
230
40.00
Fit
67.72
SE Fit
15.40
Residual
-27.72
St Resid
-3.31RX

b.
The Minitab output identifies observation 22 as having a large standardized residual and is an
observation whose x value gives it large influence. The following residual plot verifies these
observations.
Standardized Residual
-1
-2
-3
30
40
50
60
70
Fitted Value
54. a.

Salary = 707 + 0.00482 MktCap
Predictor
Constant
MktCap
Coef
707.0
0.0048154
S = 379.8
SE Coef
118.0
0.0008076
R-Sq = 66.4%
T
5.99
5.96
P
0.000
0.000
R-Sq(adj) = 64.5%
Source
Regression
Residual Error
Total
Unusual
Obs
6
17
DF
1
18
19
Observations
MktCap
Salary
507217
3325.0
120967
116.2
SS
5129071
2596647
7725718
Fit
3149.5
1289.5
MS
5129071
144258
F
35.55
SE Fit
338.6
86.4
Residual
175.5
-1173.3
P
0.000
St Resid
1.02 X
-3.17R

b.
Minitab identifies observation 6 as having a large standardized residual and observation 17 as an

observation whose x value gives it large influence. A standardized residual plot against the predicted
values is shown below:
14 - 37
Chapter 14
Standardized Residuals
3
2
1
0
-1
-2
-3
-4
500
1000
1500
2000
2500
3000
3500
Predicted Values
55.
No. Regression or correlation analysis can never prove that two variables are causally related.
56.
The estimate of a mean value is an estimate of the average of all y values associated with the same x.
The estimate of an individual y value is an estimate of only one of the y values associated with a
particular x.
57.
The purpose of testing whether 1 = 0 is to determine whether or not there is a significant

relationship between x and y. However, rejecting 1 = 0 does not necessarily imply a good fit. For
example, if 1 = 0 is rejected and r2 is low, there is a statistically significant relationship between x
and y but the fit is not very good.
58. a.

Price = 9.26 + 0.711 Shares
Predictor
Constant
Shares
S = 1.419
Coef
9.265
0.7105
SE Coef
1.099
0.1474
R-Sq = 74.4%
T
8.43
4.82
P
0.000
0.001
R-Sq(adj) = 71.2%
Source
Regression
Residual Error
Total
DF
1
8
9
SS
46.784
16.116
62.900
MS
46.784
2.015
F
23.22
P
0.001
b.
Since the p-value corresponding to F = 23.22 = .001 < = .05, the relationship is significant.
c.
r 2 = .744; a good fit. The least squares line explained 74.4% of the variability in Price.
d.
59. a.
y = 9.26 + .711(6) = 13.53

Options = - 3.83 + 0.296 Common
Predictor
Constant
Coef
-3.834
SE Coef
5.903
14 - 38
T
-0.65
P
0.529
Common
0.29567
S = 11.04
0.02648
R-Sq = 91.9%
11.17
0.000
R-Sq(adj) = 91.2%
Source
Regression
Residual Error
Total
DF
1
11
12
SS
15208
1341
16550
MS
15208
122
F
124.72
P
0.000
b.
y = 3.83 + .296(150) = 40.57 ; approximately 40.6 million shares of options grants outstanding.
c.
r 2 = .919; a very good fit. The least squares line explained 91.9% of the variability in Options.
60. a.

Horizon = 0.275 + 0.950 S&P 500
Predictor
Constant
S&P 500
Coef
0.2747
0.9498
S = 2.664
SE Coef
0.9004
0.3569
R-Sq = 47.0%
T
0.31
2.66
P
0.768
0.029
R-Sq(adj) = 40.3%
Source
DF
Regression
1
Residual Error 8
Total
9
SS
50.255
56.781
107.036
MS
50.255
7.098
F
7.08
P
0.029
b.
c.
d.
Texas Instruments has higher risk with a market beta of 1.25.
61. a.
14 - 39
Chapter 14
100
High Temperature
90
80
70
60
50
40
35
45
55
65
75
85
Low Temperature
b.
It appears that there is a positive linear relationship between the two variables.
c.

High = 23.9 + 0.898 Low
Predictor
Constant
Low
S = 5.285
Coef
23.899
0.8980
SE Coef
6.481
0.1121
R-Sq = 78.1%
T
3.69
8.01
P
0.002
0.000
R-Sq(adj) = 76.9%
Source
Regression
Residual Error
Total
62.
DF
1
18
19
SS
1792.3
502.7
2294.9
MS
1792.3
27.9
F
64.18
P
0.000
d.
e.
r 2 = .781; a good fit. The least squares line explained 78.1% of the variability in high temperature.
f.
r = .781 = +.88

Y = 10.5 + 0.953 X
Predictor
Constant
X
S = 4.250
Coef
10.528
0.9534
SE Coef
3.745
0.1382
R-sq = 85.6%
T
2.81
6.90
p
0.023
0.000
R-sq(adj) = 83.8%
14 - 40
SOURCE
DF
Regression
1
Residual Error 8
Total
9
Fit
39.13
Stdev.Fit
1.49
SS
860.05
144.47
1004.53
(
MS
860.05
18.06
95% C.I.
35.69, 42.57)
F
47.62
p
0.000
95% P.I.
28.74, 49.52)
a.
y = 10.5 + .953 x
b.
Since the p-value corresponding to F = 47.62 = .000 < = .05, we reject H0: 1 = 0.
c.
The 95% prediction interval is 28.74 to 49.52 or $2874 to $4952
d.
Yes, since the expected expense is $3913.
63. a.

Defects = 22.2 - 0.148 Speed
Predictor
Constant
Speed
Coef
22.174
-0.14783
S = 1.489
SE Coef
1.653
0.04391
R-Sq = 73.9%
T
13.42
-3.37
P
0.000
0.028
R-Sq(adj) = 67.4%
Source
Regression
Residual Error
Total
DF
1
4
5
SS
25.130
8.870
34.000
MS
25.130
2.217
F
11.33
P
0.028

New Obs
Fit
1
14.783
SE Fit
0.896
95.0% CI
12.294, 17.271)
95.0% PI
9.957, 19.608)
b.
c.
r 2 = .739; a good fit. The least squares line explained 73.9% of the variability in the number of
defects.
d.
Using the Minitab output in part (a), the 95% confidence interval is 12.294 to 17.271.
64. a.
b.
There appears to be a negative linear relationship between distance to work and number of days
absent.
The MINITAB output is shown below:
14 - 41
Chapter 14

Y = 8.10 - 0.344 X
Predictor
Constant
X
Coef
8.0978
-0.34420
S = 1.289
SE Coef
0.8088
0.07761
R-sq = 71.1%
T
10.01
-4.43
p
0.000
0.002
R-sq(adj) = 67.5%
SOURCE
DF
Regression
1
Residual Error 8
Total
9
Fit
6.377
SS
32.699
13.301
46.000
Stdev.Fit
0.512
MS
32.699
1.663
95% C.I.
5.195, 7.559)
F
19.67
p
0.002
95% P.I.
3.176, 9.577)
c.
Since the p-value corresponding to F = 419.67 is .002 < = .05. We reject H0 : 1 = 0.
d.
r2 = .711. The estimated regression equation explained 71.1% of the variability in y; this is a
reasonably good fit.
e.
The 95% confidence interval is 5.195 to 7.559 or approximately 5.2 to 7.6 days.
65. a.
Let X = the age of a bus and Y = the annual maintenance cost.

Y = 220 + 132 X
Predictor
Constant
X
Coef
220.00
131.67
S = 75.50
SE Coef
58.48
17.80
R-sq = 87.3%
T
3.76
7.40
p
0.006
0.000
R-sq(adj) = 85.7%
SOURCE
DF
Regression
1
Residual Error 8
Total
9
Fit
746.7
Stdev.Fit
29.8
SS
312050
45600
357650
(
MS
312050
5700
95% C.I.
678.0, 815.4)
F
54.75
p
0.000
95% P.I.
559.5, 933.9)
b.
Since the p-value corresponding to F = 54.75 is .000 < = .05, we reject H0: 1 = 0.
c.
r2 = .873. The least squares line provided a very good fit.
d.
The 95% prediction interval is 559.5 to 933.9 or $559.50 to $933.90
66. a.
Let X = hours spent studying and Y = total points earned

14 - 42

Y = 5.85 + 0.830 X
Predictor
Constant
X
Coef
5.847
0.8295
S = 7.523
SE Coef
7.972
0.1095
R-sq = 87.8%
T
0.73
7.58
p
0.484
0.000
R-sq(adj) = 86.2%
SOURCE
DF
Regression
1
Residual Error 8
Total
9
Fit
84.65
SS
3249.7
452.8
3702.5
Stdev.Fit
3.67
MS
3249.7
56.6
95% C.I.
76.19, 93.11)
F
57.42
p
0.000
95% P.I.
65.35, 103.96)
b.
Since the p-value corresponding to F = 57.42 is .000 < = .05, we reject H0: 1 = 0.
c.
84.65 points
d.
The 95% prediction interval is 65.35 to 103.96
67. a.

Audit% = - 0.471 +0.000039 Income
Predictor
Constant
Income
Coef
-0.4710
0.00003868
S = 0.2088
SE Coef
0.5842
0.00001731
R-Sq = 21.7%
T
-0.81
2.23
P
0.431
0.038
R-Sq(adj) = 17.4%
Source
Regression
Residual Error
Total
DF
1
18
19
SS
0.21749
0.78451
1.00200
MS
0.21749
0.04358
F
4.99
P
0.038

New Obs
1
Fit
0.8828
SE Fit
0.0523
95.0% CI
( 0.7729, 0.9927)
95.0% PI
( 0.4306, 1.3349)
b.
c.
d.
The 95% confidence interval is .7729 to .9927.
14 - 43

Ch14 Simple Regression Solutions

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Chapter 14

Simple Linear Regression

Know the definition of the following terms:

There appears to be a linear relationship between x and y.

Summations needed to compute the slope and y-intercept are:

y = 0.2 + 2.6(4) = 10.6

Simple Linear Regression

There appears to be a linear relationship between x and y.

Summations needed to compute the slope and y-intercept are:

Summations needed to compute the slope and y-intercept are:

b0 = y b1 x = 3.4 (0.5088)(5.2) = 0.7542

y = 0.75 + 0.51(4) = 2.79

Simple Linear Regression

Summations needed to compute the slope and y-intercept are:

b0 = y b1 x = 117 (5.5)(65) = 240.5

Let x = baggage capacity and y = price ($).

Summations needed to compute the slope and y-intercept are:

b0 = y b1 x = 1234.4444 (638.7561)(3.2778) = 859.26

y = 859.26 + 638.76 x = 859.26 + 638.76(3) = $1057

Simple Linear Regression

Let x = salary and y = bonus.

Summations needed to compute the slope and y-intercept are:

$1000 increase in salary will increase the bonus by $180.

y = 10.16 + .18 x = 10.16 + .18(120) = 11.95 or approximately $12,000

b0 = y b1 x = 1423.3 (.14887)(10, 485) = 137.629

y = 137.63 + 0.1489(11, 000) = 1500.27 or approximately 1500

Simple Linear Regression

Summations needed to compute the slope and y-intercept are:

b0 = y b1 x = 1062.1 (204.2449)(2.8) = 490.21

y = 490.21 + 204.24 x = 490.21 + 204.24(4) = 1307

Summations needed to compute the slope and y-intercept are:

Simple Linear Regression

b0 = y b1 x = 78.4667 (.1452)(183.4667) = 51.82

y = 51.82 + 0.145(225) = 84.4 or approximately 84

There appears to be a linear relationship between the variables.

Let x = percentage of late arrivals and y = percentage of late departures.

y = 2.106 + .883 x = 2.106 + .883(22) = 21.53%

Simple Linear Regression

b0 = y b1 x = 14, 048 (.316516)(40, 299) = 1293

y = 1293 + .3165(75, 000) = 25, 031

The agent's request for an audit appears to be justified.

Simple Linear Regression

Let x = cost of living index and y = starting salary ($1000s)

b0 = y b1 x = 26.77 ( .0415)(36.916) = 28.30

y = 28.30 .0415 x = 28.30 .0415(50) = 26.2

Thus, SSR = SST - SSE = 80 - 12.4 = 67.6

r2 = SSR/SST = 67.6/80 = .845

Thus, SSR = SST - SSE = 114.80 - 6.33 = 108.47

r2 = SSR/SST = 108.47/114.80 = .945

Thus, SSR = SST - SSE = 11.2 - 5.3 = 5.9

SST = ( yi y ) 2 = 335, 000

Thus, SSR = SST - SSE = 335,000 - 85,135.14 = 249,864.86

r2 = SSR/SST = 249,864.86/335,000 = .746

Simple Linear Regression

Thus, SSR = SST - SSE = 47,582.10 - 7547.14 = 40,034.96

r2 = SSR/SST = 40,034.96/47,582.10 = .84

b0 = y b1 x = 136.4167 (2.3325)(79.1111) = 48.11

Thus, SSR = SST - SSE = 11,373.09 2017.37 = 9355.72

y = 48.11 + 2.3325(95) = 173.5 or approximately $173,500

The summations needed in this problem are:

Thus, SSR = SST - SSE = 5,648,333.33 - 233,333.33 = 5,415,000

y = 1246.67 + 7.6 x = 1246.67 + 7.6(500) = $5046.67

Let x = speed (ppm) and y = price ($)