Question

Prove or disprove that a linear relationship exists between x and y when testing a hypothesis concerning β1. Is there overwhelming evidence at the α = .10 level of a relationship between the price of the tractors and their respective age for a two-sided test and where H0: β1 = 0? Compute the critical value for n = 5 and calculate the test statistic. The asking price of a used tractor is given for a sample size of five. Age in years are 10, 12, 15, 20, 33 with respective asking prices of $8,300 7,500 6,200 5,800 and 4,700

• A. 2.353; 35.42

• B. 1.476; -4.01

• C. 2.571; 35.42

• D. 2.353; -4.01

• E. 1.476; 35.42

Answer 1

Solution :

The statistical software output for this problem is :

Test statistics = -4.01

n = 5

df = n - 2 = 5 - 2 = 3

/ 2 = 0.05

t _0.05,3 = +/-2.353

Critical values are : 2.353

D. 2.353; -4.01