BUS 771 Dr. Carol Stockman NAME: Unit 7 Homework 1. The U.S. Department of Energy's Fuel Economy Guide provides fuel efficiency data for cars and trucks, A portion of the data for 311 compact, midsized, and large cars is contained in the file fueldata,xlsx which you can download from the class D2L shell. The dataset contains the following variables: Class identifies the size of the car; Compact, Midsize, or Large Displacement = engine displacement in liters FuelType shows whether the car uses premium (P) or regular (R) fuel HwyMPG = fuel efficiency rating for highway driving in miles per gallon . Develop an estimated regression equation to predict the fuel efficiency for highway driving given the engine's displacement. Plot the residuals from this regression to see if you see any pattern. Conduct a hypothesis test to determine whether the coefficient on Displacement is statistically significantly different from 0 using the 0.05 level of significance. How much of the variation in the sample values of HwyMPG does this estimated regression equation explain? b. Create a scatter chart with HwyMPG on the y-axis and displacement on the x-axis for which the points representing compact, midsize, and large automobiles are shown in different shapes and/or colors. What does this chart suggest about the relationship between the class of automobile (compact, midsize, and large) and HwyMPG? c. Add dummy variables ClassMidsize and ClassLarge to the simple linear regression model in part a. The value of ClassMidsize is 1 if the car is a midsize car and 0 otherwise; the value of ClassLarge is 1 if the car is a large car and 0 otherwise. Thus, for a compact car, the value of ClassMidsize and the value of ClassLarge are both 0. Estimate the new regression equation. What happened to the adjusted R" when these variables were added to the regression? What does this tell you? d. Use significance level of 0.05 to determine whether the dummy variables added to the model in part care significant