Recall the data on disk drives we saw in chapter 6 exercise 4. Suppose we want to

Question:

Recall the data on disk drives we saw in chapter 6 exercise 4. Suppose we want to predict Price from Capacity.

a) Find the slope estimate, b1.
b) What does it mean, in this context?
c) Find the intercept, b0.
d) What does it mean, in this context? Is it meaningful?
e) Write down the equation that predicts Price from Capacity.
f) What would you predict for the price of a 20 TB drive?
g) A 20 TB drive on Amazon.com was listed at $2017.86. According to the model, does this seem like a good buy? How much would you save compared to what you expected to pay?
h) Does the model overestimate or underestimate the price?
i) The correlation is very high. Does this mean that the model is accurate? Explain.