Use the advertised prices for Toyota Corollas given in Exercise 59 to create a linear model for the relationship between a car's Age and its Price.
a) Find the equation of the regression line.
b) Explain the meaning of the slope of the line.
c) Explain the meaning of the y-intercept of the line.
d) If you want to sell a 7-year-old Corolla, what price seems appropriate?
e) You have a chance to buy one of two cars. They are about the same age and appear to be in equally good condition. Would you rather buy the one with a positive residual or the one with a negative residual? Explain.
f) You see a "For Sale" sign on a 10-year-old Corolla stating the asking price as $8,500. What is the residual?
g) Would this regression model be useful in establishing a fair price for a 25-year-old car? Explain.
Age (yr) Price Advertised ($)
9 ……………………… 11,599
4 ……………………… 14,998
4 ……………………… 12,998
7 ……………………… 10,998
3 ……………………… 15,998
5 ……………………… 14,599
5 ……………………… 11,559
8 ……………………… 9,998
9 ……………………… 9,998
1 ……………………… 15,998
5 ……………………… 12,599
3 ……………………… 16,998
5 ……………………… 13,998