Question

The table below gives the list price and the number of bids received for five randomly selected items sold through online auctions. Using this data, consider the equation of the regression line, yˆ=b0+b1x for predicting the number of bids an item will receive based on the list price. Keep in mind, the correlation coefficient may or may not be statistically significant for the data given. Remember, in practice, it would not be appropriate to use the regression line to make a prediction if the correlation coefficient is not statistically significant.

Price in Dollars	24	32	34	35	44
Number of Bids	2	3	5	6	8

Find the estimated y-intercept and the estimated slope. Then substitute those two values into the equation for the regression line to find the estimated linear model. According to this model, if the value of the independent variable is increased by one unit, then find the change in the dependent variable yˆ.

Determine if the statement "All points predicted by the linear model fall on the same line" is true or false.

Then, find the estimated value of y when x=2.5. Round your answer to three decimal places.

Lastly, find the value of the coefficient of determination. Round your answer to three decimal places.

Answer 1

The statistic software output for this problem is:

y intercept = -5.895

slope =0.316

the change in the dependent variable yˆ is slope

True

Estimated value = -5.104

the coefficient of determination = 0.899