1. Assume you have noted the following prices for books and the number of pages that each book
contains.
ANS:
a. = 1.0416 + 0.0099x
b. r 2 = .5629; the regression equation has accounted for 56.29% of the total sum of squares
c. rxy = 0.75
t = 2.54 > 2.015 (df = 5); p-value is between .05 and 0.1; (Excel’s results: p-value of 0.052);
reject Ho, and conclude x and y are related
2. Assume you have noted the following prices for books and the number of pages that each book
contains.
a. Perform an F test and determine if the price and the number of pages of the books are related.
Let = 0.01.
b. Perform a t test and determine if the price and the number of pages of the books are related. Let
= 0.01.
c. Develop a 90% confidence interval for estimating the average price of books that contain 800
pages.
d. Develop a 90% confidence interval to estimate the price of a specific book that has 800 pages.
ANS:
a. F = 6.439 < 16.26; p-value is between 0.1 and 0.2
(Excel’s result: p-value = .052); do not reject Ho; conclude x and y are not related
b. t = 2.5376 < 4.032; p-value is between 0.1 and 0.2.
(Excel’s result: p-value = .052); do not reject Ho; conclude x and y are not related
c. $7.29 to $10.63 (rounded)
d. $5.62 to $12.31 (rounded)
3. The following data represent the number of flash drives sold per day at a local computer shop and their
prices.
a. Develop a least-squares regression line and explain what the slope of the line indicates.
b. Compute the coefficient of determination and comment on the strength of relationship between
x and y.
c. Compute the sample correlation coefficient between the price and the number of flash drives
sold. Use = 0.01 to test the relationship between x and y.
ANS:
a. = 29.7857 - 0.7286x
The slope indicates that as the price goes up by $1, the number of units sold goes down by
0.7286 units.
b. r 2 = .8556; the regression equation has accounted for 85.56% of the total sum of squares
c. rxy = -0.92
t = -5.44 < -4.032 (df = 5); p-value .01; (Excel’s result: p-value = .0028); reject Ho, and
conclude x and y are related
4. The following data represent the number of flash drives sold per day at a local computer shop and their
prices.
a. Perform an F test and determine if the price and the number of flash drives sold are related. Let
= 0.01.
b. Perform a t test and determine if the price and the number of flash drives sold are related. Let
= 0.01.
ANS:
a. F = 29.624 > 16.26; p-value .01; (Excel’s result: p-value = .0028); reject Ho, x and y are
related
b. t = -5.4428 < -4.032; p-value .01; (Excel’s result: p-value = .0028); reject Ho, x and y are
related
5. Shown below is a portion of an Excel output for regression analysis relating Y (dependent variable)
and X (independent variable).
ANOVA
df SS
Regression 1 110
Residual 8 74
Total 9 184
ANS:
a through d
Summary Output
Regression Statistics
Multiple R 0.7732
R Square 0.5978
Adjusted R Square 0.5476
Standard Error 3.0414
Observations 10
ANOVA
df SS MS F Significance F
Regression 1 110 110 11.892 0.009
Residual 8 74 9.25
Total 9 184
ANOVA
df SS
Regression 1 24.011
Residual 8 67.989
ANS:
a through d
Summary Output
Regression Statistics
Multiple R 0.511
R Square 0.261
Adjusted R Square 0.169
Standard Error 2.915
Observations 10
ANOVA
df SS MS F Significance F
Regression 1 24.011 24.011 2.825 0.131
Residual 8 67.989 8.499
Total 9 92
7. Part of an Excel output relating X (independent variable) and Y (dependent variable) is shown below.
Fill in all the blanks marked with "?".
Summary Output
Regression Statistics
Multiple R 0.1347
R Square ?
Adjusted R Square ?
Standard Error 3.3838
Observations ?
ANOVA
df SS MS F Significance F
Regression ? 2.7500 ? ? 0.632
Residual ? ? 11.45
Total 14 ?
ANS:
Summary Output
Regression Statistics
Multiple R 0.1347
R Square 0.0181
Adjusted R Square -0.0574
Standard Error 3.384
Observations 15
ANOVA
df SS MS F Significance F
Regression 1 2.750 2.75 0.2402 0.6322
Residual 13 148.850 11.45
Total 14 151.600
8. Shown below is a portion of a computer output for a regression analysis relating Y (dependent
variable) and X (independent variable).
ANOVA
df SS
Regression 1 115.064
Residual 13 82.936
Total
a. Perform a t test using the p-value approach and determine whether or not Y and X are related.
Let = 0.05.
b. Using the p-value approach, perform an F test and determine whether or not X and Y are
related.
c. Compute the coefficient of determination and fully interpret its meaning. Be very specific.
ANS:
a and b
Summary Output
Regression Statistics
Multiple R 0.7623
R Square 0.5811
Adjusted R Square 0.5489
Standard Error 2.5258
Observations 15
ANOVA
df SS MS F Significance F
Regression 1 115.064 115.064 18.036 0.001
Residual 13 82.936 6.380
Total 14 198
9. Part of an Excel output relating X (independent variable) and Y (dependent variable) is shown below.
Fill in all the blanks marked with "?".
Summary Output
Regression Statistics
Multiple R ?
R Square 0.5149
Adjusted R Square ?
Standard Error 7.3413
Observations 11
ANOVA
df SS MS F Significance F
Regression ? ? ? ? 0.0129
Residual ? ? ?
Total ? 1000
ANS:
Summary Output
Regression Statistics
Multiple R 0.7176
R Square 0.5149
Adjusted R Square 0.4611
Standard Error 7.3413
Observations 11
ANOVA
df SS MS F Significance F
Regression 1 514.9455 514.9455 9.5546 0.0129
Residual 9 485.0545 53.8949
Total 10 1000.0000
10. Shown below is a portion of a computer output for a regression analysis relating Y (demand) and X
(unit price).
ANOVA
df SS
Regression 1 5048.818
Residual 46 3132.661
Total 47 8181.479
a. Perform a t test and determine whether or not demand and unit price are related. Let = 0.05.
b. Perform an F test and determine whether or not demand and unit price are related. Let =
0.05.
c. Compute the coefficient of determination and fully interpret its meaning. Be very specific.
d. Compute the coefficient of correlation and explain the relationship between demand and unit
price.
ANS:
a and b
Summary Output
Regression Statistics
Multiple R 0.786
R Square 0.617
Adjusted R Square 0.609
Standard Error 8.252
Observations 48
ANOVA
df SS MS F Significance F
Regression 1 5048.818 5048.818 74.137 0.000
Residual 46 3132.661 68.101
Total 47 8181.479
11. Shown below is a portion of a computer output for a regression analysis relating supply (Y in
thousands of units) and unit price (X in thousands of dollars).
ANOVA
df SS
Regression 1 354.689
Residual 39 7035.262
ANS:
a through c
Regression Statistics
Multiple R 0.219
R Square 0.048
Adjusted R Square 0.024
Standard Error 13.431
Observations 41
ANOVA
df SS MS F Significance F
Regression 1 354.689 354.689 1.966 0.169
Residual 39 7035.262 180.391
Total 40 7389.951
12. Given below are four observations collected in a regression study on two variables x (independent
variable) and y (dependent variable).
x y
2 4
6 7
9 8
9 9
ANS:
Regression Statistics
Multiple R 0.977
R Square 0.955
Adjusted R Square 0.932
Standard Error 0.564
Observations 4
ANOVA
df SS MS F Significance F
Regression 1 13.364 13.364 42.000 0.023
Residual 2 0.636 0.318
Total 3 14
a. = 2.864 + 0.636x
b. p-value < .05; reject Ho
c. p-value < .05; reject Ho
d. 0.955
13. Given below are five observations collected in a regression study on two variables, x (independent
variable) and y (dependent variable).
x y
2 4
3 4
4 3
5 2
6 1
ANS:
Regression Statistics
Multiple R 0.970
R Square 0.941
Adjusted R Square 0.922
Standard Error 0.365
Observations 5
ANOVA
df SS MS F Significance F
Regression 1 6.4 6.400 48.000 0.006
Residual 3 0.4 0.133
Total 4 6.8
a. = 6 - 0.8 x
b. p-value < .05; reject Ho
c. p-value < .05; reject Ho
d. 0.941
e. -0.970
14. Below you are given a partial computer output based on a sample of 8 observations, relating an
independent variable (x) and a dependent variable (y).
Analysis of Variance
SOURCE SS
Regression
Error (Residual) 41.674
Total 71.875
ANS:
a. = 13.251 + 0.803x
b. t = 2.086; p-value is between .05 and .1 (critical t = 2.447); do not reject Ho
c. F = 4.348; p-value is between .05 and .1 (critical F = 5.99); do not reject Ho
d. 0.42
15. Below you are given a partial computer output based on a sample of 8 observations, relating an
independent variable (x) and a dependent variable (y).
Analysis of Variance
SOURCE SS
Regression 400
Error (Residual) 138
ANS:
a. = -9.462 + 0.769x
b. t = 4.17; p-value (actual p-value using Excel = 0.0059) < .05; reject Ho
c. F = 17.39; p-value (actual p-value using Excel = 0.0059) < .05; reject Ho
d. 0.743
16. The following data represent a company's yearly sales volume and its advertising expenditure over a
period of 8 years.
(Y) (X)
Sales in Advertising
Millions of Dollars in ($10,000)
15 32
16 33
18 35
17 34
16 36
19 37
19 39
24 42
a. Develop a scatter diagram of sales versus advertising and explain what it shows regarding the
relationship between sales and advertising.
b. Use the method of least squares to compute an estimated regression line between sales and
advertising.
c. If the company's advertising expenditure is $400,000, what are the predicted sales? Give the
answer in dollars.
d. What does the slope of the estimated regression line indicate?
e. Compute the coefficient of determination and fully interpret its meaning.
f. Use the F test to determine whether or not the regression model is significant at = 0.05.
g. Use the t test to determine whether the slope of the regression model is significant at = 0.05.
h. Develop a 95% confidence interval for predicting the average sales for the years when
$400,000 was spent on advertising.
i. Compute the correlation coefficient.
ANS:
a.
The scatter diagram shows a positive relation between sales and advertising.
b. = -10.42 + 0.7895X
c. $21,160,000
d. As advertising is increased by $10,000, sales are expected to increase by $789,500.
e. 0.8459; 84.59% of variation in sales is explained by variation in advertising
f. F = 32.93; p-value (actual p-value using Excel = 0.0012) < .05; reject Ho; it is significant
(critical F = 5.99)
g. t = 5.74; p-value (actual p-value using Excel = 0.0012) < .05; reject Ho; significant (critical t =
2.447)
h. $19,460,000 to $22,860,000
i. 0.9197
17. Given below are five observations collected in a regression study on two variables x (independent
variable) and y (dependent variable).
x y
10 7
20 5
30 4
40 2
50 1
ANS:
a. = 8.3 - 0.15x
b. t = -15; p-value (actual p-value using Excel = 0.0001) < .05; reject Ho (critical t = 3.18)
c. F = 225; p-value (actual p-value using Excel = 0.0001) < .05; reject Ho (critical F = 10.13)
d. 0.9868
e. 0.9934
18. Below you are given a partial computer output based on a sample of 14 observations, relating an
independent variable (x) and a dependent variable (y).
Analysis of Variance
SOURCE SS
Regression 958.584
Error (Residual)
Total 1021.429
ANS:
a. = 6.428 + 0.47x
b. t = 13.529; p-value (actual p-value using Excel = 0.0000) < .05; reject Ho (critical t = 2.179)
c. F = 183.04; p-value (actual p-value using Excel = 0.0000) < .05; reject Ho (critical F = 4.75)
d. 0.938
e. 0.968
19. Below you are given a partial computer output based on a sample of 21 observations, relating an
independent variable (x) and a dependent variable (y).
Analysis of Variance
SOURCE SS
Regression 1,759.481
Error 259.186
ANS:
a. = 30.139 - 0.252X
b. t = -11.357; p-value (almost zero) < = .05; reject Ho (critical t = 2.093)
c. F = 128.982; p-value (almost zero) < = .05; reject Ho (critical F = 4.38)
d. 0.872
e. -0.934
20. An automobile dealer wants to see if there is a relationship between monthly sales and the interest rate.
A random sample of 4 months was taken. The results of the sample are presented below. The estimated
least squares regression equation is
= 75.061 - 6.254X
Y X
Monthly Sales Interest Rate (In Percent)
22 9.2
20 7.6
10 10.4
45 5.3
a. Obtain a measure of how well the estimated regression line fits the data.
b. You want to test to see if there is a significant relationship between the interest rate and
monthly sales at the 1% level of significance. State the null and alternative hypotheses.
c. At 99% confidence, test the hypotheses.
d. Construct a 99% confidence interval for the average monthly sales for all months with a 10%
interest rate.
e. Construct a 99% confidence interval for the monthly sales of one month with a 10% interest
rate.
ANS:
a. R2 = 0.8687
b. H0: 1 = 0
Ha: 1 0
c. test statistic t = -3.64; p-value is between .05 and .10 (critical t = 9.925); do not reject H0
d. -33.151 to 58.199; therefore, 0 to 58.199
e. -67.068 to 92.116; therefore, 0 to 92.116
PTS: 1 TOP: Regression Analysis
21. Jason believes that the sales of coffee at his coffee shop depend upon the weather. He has taken a
sample of 6 days. Below you are given the results of the sample.
ANS:
a. Cups of coffee sold
b. = 605.714 - 5.943X
c. 0.95197
d. H0: 1 = 0
Ha: 1 0
t = -6.218; p-value (actual p-value using Excel = 0.0034) < = .05; reject Ho (critical t =
2.776)
e. 70.8 or 71 cups
22. Researchers have collected data on the hours of television watched in a day and the age of a person.
You are given the data below.
ANS:
a. Hours of Television
b. = 6.564 - 0.1246X
c. H0: 1 = 0
Ha: 1 0
t = -12.018; p-value (actual p-value using Excel = 0.0002) < = .05; reject H0 (critical t =
3.18)
d. 0.98 (rounded); 98 % of variation in hours of watching television is explained by variation in
age.
23. Given below are seven observations collected in a regression study on two variables, X (independent
variable) and Y (dependent variable).
X Y
2 12
3 9
6 8
7 7
8 6
7 5
9 2
ANS:
a. = 13.75 -1.125X
b. t = -5.196; p-value (actual p-value using Excel = 0.0001) < = .05; reject Ho (critical t =
2.571)
c. F = 27; p-value (actual p-value using Excel = 0.0001) < = .05; reject Ho (critical F = 6.61)
d. 0.844
24. The owner of a retail store randomly selected the following weekly data on profits and advertising
cost.
a. Write down the appropriate linear relationship between advertising cost and profits. Which is
the dependent variable? Which is the independent variable?
b. Calculate the least squares estimated regression line.
c. Predict the profits for a week when $200 is spent on advertising.
d. At 95% confidence, test to determine if the relationship between advertising costs and profits is
statistically significant.
e. Calculate the coefficient of determination.
ANS:
a. E(Y) = 0 + 1X, where Y is profit and X is advertising cost
b. = 210.0676 + 0.80811X
c. $371.69
d. t = 6.496; p-value (actual p-value using Excel = 0.0013) < = .05; reject Ho; relationship is
significant (critical t = 3.182)
e. 0.9336
25. \The owner of a bakery wants to analyze the relationship between the expenditure of a customer and
the customer's income. A sample of 5 customers is taken and the following information was obtained.
Y X
Expenditure Income (In Thousands)
.45 20
10.75 19
5.40 22
7.80 25
5.60 14
ANS:
a. R2 = 0.0079
b. H0: 1 = 0
Ha: 1 0
t = 0.154; p-value (actual p-value using Excel = 0.8871) > = .05; do not reject H0; (critical t =
3.182)
c. 0.185 to 12.185
d. -9.151 to 21.151
26. Below you are given information on annual income and years of college education.
ANS:
a. = 25.6 + 5.2X
b. $56,800
c. 0.939
d. t = 6.789; p-value (actual p-value using Excel = 0.0008) < = .05; reject Ho; significant
(critical t = 3.182
e. F = 46.091; p-value (actual p-value using Excel = 0.0008) < = .05; reject Ho; significant
(critical F = 10.13)
27. Below you are given information on a woman's age and her annual expenditure on purchase of books.
ANS:
a. = 54.834 + 7.536X
2
b. R = 0.568
c. t = 1.621; p-value (actual p-value using Excel = 0.2464) > = .05; do not reject Ho; not
significant (critical t = 4.303)
d. F = 2.628; p-value (actual p-value using Excel = 0.2464) > = .05; do not reject Ho; not
significant (critical F = 18.51)
28. The following sample data contains the number of years of college and the current annual salary for a
random sample of heavy equipment salespeople.
Annual Income
Years of College (In Thousands)
2 20
2 23
3 25
4 26
3 28
1 29
4 27
3 30
4 33
4 35
a. Which variable is the dependent variable? Which is the independent variable?
b. Determine the least squares estimated regression line.
c. Predict the annual income of a salesperson with one year of college.
d. Test if the relationship between years of college and income is statistically significant at the .05
level of significance.
e. Calculate the coefficient of determination.
f. Calculate the sample correlation coefficient between income and years of college. Interpret the
value you obtain.
ANS:
a. Y (dependent variable) is annual income and X (independent variable) is years of college
b. = 21.6 + 2X
c. $23,600
d. The relationship is not statistically significant since t = 1.51; p-value (actual p-value using
Excel = 0.1696) > = .05 (critical t = 2.306)
e. 0.222
f. 0.471; there is a positive correlation between years of college and annual income
29. The following data shows the yearly income (in $1,000) and age of a sample of seven individuals.
ANS:
a. = 16.204 + 0.3848X
b. $27,748
c. 0.2266
d. t = 1.21; p-value (actual p-value using Excel = 0.2803) > = .05; not significant (critical t =
2.571)
e. F = 1.46; p-value (actual p-value using Excel = 0.2803) > = .05; not significant (critical F =
6.61)
30. The following data show the results of an aptitude test (Y) and the grade point average of 10 students.
Aptitude Test
Score (Y) GPA (X)
26 1.8
31 2.3
28 2.6
30 2.4
34 2.8
38 3.0
41 3.4
44 3.2
40 3.6
43 3.8
ANS:
a. = 8.171 + 9.4564X
b. 0.83; there is a fairly strong relationship
c. t = 6.25; p-value (actual p-value using Excel = 0.0002) < =.05; it is significant (critical t =
2.306)
d. F = 39.07; p-value (actual p-value using Excel = 0.0002) < =.05; it is significant (critical F =
5.32)
31. Shown below is a portion of the computer output for a regression analysis relating sales (Y in millions
of dollars) and advertising expenditure (X in thousands of dollars).
Analysis of Variance
SOURCE DF SS
Regression 1 1,400
Error 18 3,600
ANS:
a. 20
b. t = 2.66; p-value is between 0.01 and 0.02; they are related (critical t = 2.101)
c. R2 = 0.28
d. 28% of variation in sales is explained by variation in advertising expenditure.
e. $4,480,000
32. A company has recorded data on the daily demand for its product (Y in thousands of units) and the
unit price (X in hundreds of dollars). A sample of 15 days demand and associated prices resulted in the
following data.
a. Using the above information, develop the least-squares estimated regression line and write the
equation.
b. Compute the coefficient of determination.
c. Perform an F test and determine whether or not there is a significant relationship between
demand and unit price. Let = 0.05.
d. Would the demand ever reach zero? If yes, at what price would the demand be zero?
ANS:
a. = 12.138 - 0.6277X
b. R2 = 0.3703
c. F = 7.65; p-value is between .01 and .025; reject Ho and conclude that demand and unit price
are related (critical F = 4.67)
d. Yes, at $1,934
33. A regression and correlation analysis resulted in the following information regarding an independent
variable (x) and a dependent variable (y).
X = 42 (Y - )(X - ) = 37
Y = 63 (X - )2 = 84
n=7 (Y - )2 = 28
ANS:
a. = 6.3571 + 0.4405x
b. p-value < .05; reject Ho
c. p-value < .05; reject Ho
d. 0.582