Reference no: EM133304713

Instruction

The Cost of a Postage Stamp-Consider the following data. Use the procedures in this chapter to capture the trend of the data if one exists. Would you eliminate any data points? Why? Would you be willing to use your model to predict the price of a postage stamp on January 1, 2010? What do the various models you construct predict about the price on January 1, 2010? When will the price reach $1? You might enjoy reading the article on which this problem is based: Donald R. Byrkit and Robert E. Lee, ‘‘The Cost of a Postage Stamp, or Up, Up, and Away,'' Mathematics and Computer Education 17, no. 3 (Summer 1983): 184-190.

The Cost of a Postage Stamp-Consider the following data.

Date	Base year	First-class stamp	Comments
	x	y($)
1885-1917	0	0.02
1917-1919	1	0.03	(Wartime increase)
1919	2	0.02	(Restored by Congress)
July 6, 1932	3	0.03
August 1, 1958	4	0.04
January 7, 1963	5	0.05
January 7, 1968	6	0.06
May 16, 1971	7	0.08
March 2, 1974	8	0.1
December 31, 1975	9	0.13	(Temporary)
July 18, 1976	10	0.13
May 15, 1978	11	0.15
March 22, 1981	12	0.18
November 1, 1981	13	0.2
February 17, 1985	14	0.22
April 3, 1988	15	0.25
February 3, 1991	16	0.29
January 1, 1995	17	0.32
January 10, 1999	18	0.33
January 7, 2001	19	0.34
June 30, 2002	20	0.37
January 8, 2006	21	0.39
May 14, 2007	22	0.41
May 12, 2008	23	0.42
May 11, 2009	24	0.44
January 22, 2012	25	0.45

Use the procedures in this chapter to capture the trend of the data if one exists.

Question 1: Would you eliminate any data points? Why?

Question 2: Would you be willing to use your model to predict the price of a postage stamp on January 1, 2010?

Question 3: What do the various models you construct predict about the price on January 1, 2010?

Question 4: When will the price reach $1?