Q1a.

𝑥𝑖 − 𝑥̅ 𝑦𝑖 − 𝑦̅ (𝑥𝑖 − 𝑥̅ ). (𝑦𝑖 − 𝑦̅ )
Person Y (weekly expenditure on fruit) X (weekly income) (𝑥𝑖 − 𝑥̅ )2

1 18 150 -112.5 -11 1237.5 12656.25

2 24 175 -87.5 -5 437.5 7656.25
3 26 200 -62.5 -3 187.5 3906.25
4 23 225 -37.5 -6 225 1406.25
5 30 250 -12.5 1 -12.5 156.25
6 27 275 12.5 -2 -25 156.25
7 34 300 37.5 5 187.5 1406.25
8 35 325 62.5 6 375 3906.25
9 33 350 87.5 4 350 7656.25
10 40 375 112.5 11 1237.5 12656.25
29 262.5 4200 51562.5

̂0 = 𝑦̅ − 𝛽1 . 𝑥̅ = 29- 0.0815(262.5) = 7.6182

𝛽

(𝑥 −𝑥̅ )(𝑦 −𝑦̅ ) 4200

𝛽̂1 = ∑𝑛𝑖=1 𝑖 (𝑥 −𝑥̅ )𝑖2 =51562.5 = 0.0815
𝑖

b.) hand draw graph and scan it in

c.)

(𝑦𝑖 − 𝑦̅)2 𝑦̂ 𝑢̂ 𝑦̂- 𝑦̅ (𝑦̂−𝑦̅)2 𝑢̂2

121 19.8364 -1.8364 -9.1636 83.9722314 3.372231405
25 21.8727 2.1273 -7.1273 50.79801653 4.525289256
9 23.9091 2.0909 -5.0909 25.91735537 4.371900826
36 25.9455 -2.9455 -3.0545 9.330247934 8.675702479
1 27.9818 2.0182 -1.0182 1.036694215 4.073057851
4 30.0182 -3.0182 1.0182 1.036694215 9.109421488
25 32.0545 1.9455 3.0545 9.330247934 3.784793388
36 34.0909 0.9091 5.0909 25.91735537 0.826446281
16 36.1273 -3.1273 7.1273 50.79801653 9.779834711
121 38.1636 1.8364 9.1636 83.9722314 3.372231405
394 342 51.89

TSS = 394

ESS = 342

RSS = 51.89

(𝑦̂−𝑦̅)2 342
𝑅 2 = (𝑦 −𝑦̅)2 = 394 = 0.8683
𝑖

TSS = ESS + RSS = 342 +51.89 = 394

𝜎̂ 2 = RSS / (n-2)= 51.89/ (10-2) =6.486

𝜎̂=√6.486 = 2.547
𝜎2 6.486
Var (𝛽̂1 ) = (𝑥 −𝑥̅ )2 =51562.5= 0.0001
𝑖

𝜎2
s.e (𝛽̂1 ) = √ =√0.0001 = 0.0112
(𝑥𝑖 −𝑥̅ )2