Question

Let x be the average number of employees in a group health insurance plan, and let y be the average administrative cost as a percentage of claims.

x	3	7	15	30	71
y	40	35	30	27	17

(a) Make a scatter diagram of the data and visualize the line you think best fits the data.

(b) Would you say the correlation is low, moderate, or strong? positive or negative?

strong and positivelow and positive     moderate and positivestrong and negativelow and negativemoderate and negative

(c) Use a calculator to verify that Σx = 126, Σx² = 6224, Σy = 149, Σy² = 4743, and Σxy = 2832. Compute r. (Round your answer to three decimal places.)
r =  

As x increases, does the value of r imply that y should tend to increase or decrease? Explain.

Given our value of r, y should tend to increase as x increases.Given our value of r, y should tend to decrease as x increases.     Given our value of r, we cannot draw any conclusions for the behavior of y as x increases.Given our value of r, y should tend to remain constant as x increases.

Answer 1

Part a)

Part b)

strong and negative

Part c)

	X	Y	X * Y	X2	Y2
	3	40	120	9	1600
	7	35	245	49	1225
	15	30	450	225	900
	30	27	810	900	729
	71	17	1207	5041	289
Total	126	149	2832	6224	4743

r = -0.960

Given our value of r, y should tend to decrease as x increases.