Question

Let x be the average number of employees in a group health insurance plan, and let...

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 36 72
y 40 35 30 28 16

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

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Submission Data


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

moderate and positivestrong and negative    moderate and negativelow and positivelow and negativestrong and positive


(c) Use a calculator to verify that Σx = 133, Σx2 = 6763, Σy = 149, Σy2 = 4765, and Σxy = 2975. 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 remain constant 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 decrease as x increases.

Homework Answers

Answer #1

Part a)

Part b)

There is strong but negative correlation between variables

Part c)

X Y X * Y X2 Y2
3 40 120 9 1600
7 35 245 49 1225
15 30 450 225 900
36 28 1008 1296 784
72 16 1152 5184 256
Total 133 149 2975 6763 4765



r = -0.966

Part d)

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

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