Question

Oil and Gas Prices. The average gasoline price per gallon (in cities) and the cost of a barrel of oil are shown for a random selection of weeks from 2009-2010. Is there a linear relationship between the variables? α = 0.05

Oil ($) 78.66 87.23 85.44 81.35 58.11 43.57

Gasoline ($) 2.791 2.929 2.547 2.231 2.479 2.340 Ho: ρ = 0 H1: ρ not equal 0

Step 2: Find the critical value (from table I) (example: .123) Critical r value is:

Step 3: Compute the test value using the formula or calculator (round to three decimal places, example .645): r test value is:

Step 4: Reject the null or do not reject the null (type in either Reject the null or do not reject the null only):

Step 5: Conclusion sentence (type in either is or is not only, to reflect what you found) and state if it is positive or negative. There enough evidence to support a Blank 5 relationship. Find the equation of the regression line y' = a + bx and fill in a and b below (round a and b to three decimal places, example: 4.123 or .234) y' = If oil is $60 a barrel what is the cost of gasoline? (do not round)

Answer 1

Step 2:

n = 6

df = n-2

= 4

Critical r value = 0.811

Step 3:

Correlation formula:

r = 0.4844

Step 4:

Since r = 0.4844 < 0.811 i.e. we fail to reject H0.

Step 5:

We can't conclude that there is a relationship between oil and gas prices.

Regression equation:

y = 2.023 + 0.00732*x

When x = 60 then

y = 2.023 + 0.00732*60

= 2.4622

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