Amazon.com has become one of the most successful online merchants. Two measures of its success are sales and net income/loss figures. They are given here.

Year Net Income/Loss Sales 1995 0.3 0.5 1996 5.7 15.7 1997 27.5 147.7 1998 124.5 609.8 1999 719.9 1,639.8 2000 1,411.2 2,761.9 2001 567.3 3,122.9 2002 149.1 3,933 2003 35.3 5,263.7 2004 588.5 6,921 2005 359 8,490 2006 190 10,711 2007 476 14,835

a. Produce a scatter plot for Amazon’s net income/loss and sales figures for the period 1995 to 2007.
Determine the order (or degree) of the polynomial that could be used to predict Amazon’s net income/loss using sales figures for the period 1995 to 2007.

b. To simplify the analysis, consider only the values from 1995–2004. Produce the polynomial indicated by this data.

c. Test to determine whether the overall model from part b is statistically significant. Use a significance level of 0.10.

d. Conduct a hypothesis test to determine if curvature exists in the model that predicts Amazon’s net income/loss using sales figures from part

b. Use a significance level of 0.02 and the test statistic approach.