Variables-scatterplot and correlations

Reference no: EM1395562

Question: The owner of Maumee Ford-Mercury wants to study the relationship between the age of a car and its selling price. Listed below is a random sample of 12 used cars sold at the dealership during the last year.

Car Age (years) Selling Price ($000) Car Age (years) Selling Price ($000)
1 9 8.1 7 8 7.6
2 7 6.0 8 11 8.0
3 11 3.6 9 10 8.0
4 12 4.0 10 12 6.0
5 8 5.0 11 6 8.6
6 7 10.0 12 6 8.0

a. If we want to estimate selling price on the basis of the age of the car, which variable is the dependent variable and which is the independent variable?

b. Draw a scatter diagram.

c. Determine the coefficient of correlation.

d. Determine the coefficient of determination.

e. Interpret these statistical measures. Does it surprise you that the relationship is inverse?

Reference no: EM1395562

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