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Do the accompanying data provide sufficient evidence that a straight line is useful for characterizing the relationship between x and y?

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Short Answer

Expert verified

The straight line is useful for defining the relationship between x and y at a =.05.

Step by step solution

01

Introduction

A straight line is the outcome of a simple linear regression study of two or more independent variables. A regression with numerous relevant variables might result in a curved line in rare instances.

02

Find t

SSxy=xiyi-xiyin=65-19x216=65-3996=390-3996

=-96=-1.5

SSxx=xi2-(xi)2n=65-(19)26=65-3616=390-3616

=296=4.84

β1^=SSxySSxx=-1.54.84=-0.31

SSyy=y2-(y)2n=91-(19)26=91-3616=546-3616

=1856=30.84

SSE=SSyy-β1^SSxy=30.84-(-0.31)(-1.5)=30.84-0.465=30.375

s2=SSEn-2=30.3756-2=30.3754=7.59375

s=SSEn-2=30.3756-2=30.3754=7.59375

=2.7557

t=β1^s/SSxx=-0.312.7557/4.84=-0.312.7557/2.2=-0.311.2525

=-0.3883

The rejection region is defined as t > 0.3883 or t -0.3883.

There is insufficient evidence to suggest that a straight line is suitable for defining the relationship between x and y at a =.05 since the observed value of the test statistic does not lie in the rejection region.

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Most popular questions from this chapter

Visually compare the scatter plots shown below. If a least squares line were determined for each data set, which do you think would have the smallest variance s2? Explain.

Refer to Exercise 2.18 and calculate the number of the 600 items falling into each of the classes. Then graph a frequency histogram for these data.

Refer to the Academy of Management Journal(Aug. 2008) study of corporateacquisitions from 1980 to 2000, Exercise 2.12 (p. 74). Thedata file includes the number of firms with at least one

acquisition each year.

a.Construct either a dot plot or a stem-and-leaf display

for the annual number of firms with at least one

acquisition.

b.On the graph, part a, highlight (or circle) the values for

the years 1996–2000. Do you detect a pattern? If so,

what conclusion can you draw from the data?

Year

Number of firms sampled

Number with acquisitions

1980

1963

18

1990

2197

350

2000

2778

748

Total

6938

1116

Refer to Exercise 11.14. After the least-squares line has been obtained, the table below (which is similar to Table 11.2) can be used for (1) comparing the observed and the predicted values of y and (2) computing SSE.

a. Complete the table.

b. Plot the least-squares line on a scatterplot of the data. Plot the following line on the same graph:

y^= 14 - 2.5x.

c. Show that SSE is larger for the line in part b than for the least-squares line.

A company is analysing the prices at which its items are sold. Graph the relative frequency histogram for the 600 items summarized in the accompanying relative frequency table.

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