Question

Corvette Prices. The Kelley Blue Book provides information on wholesale and retail prices of cars. Following are age and price data for $10$ randomly selected Corvettes between $1$and 6 years old. Here, $x$denotes age, in years, and $y$denotes price, in hundreds of dollars.

Short answer

The residuals are roughly centered and symmetric about the x-axis in a horizontal band. The normal probability plot for the residuals can likewise be described as (almost) linear, albeit the deviation from linearity is significant enough to raise some concerns.

Step-by-step solution

Given Information

Given data:

Explanation

Satisfying regression-inference assumptions $1-3$requires that there are constants ${\beta }_0,{\beta }_1$and $\sigma$, such that, for each age, $x$, the prices of all Corvette of that age are normally distributed with mean ${\beta }_0,{\beta }_{1}x$and standard deviation $\sigma$.