ECONO 2463 Business Statistics

Chapter 12

1. Complete the following parts to calculate (by hand) the estimated regression equation for x and y.

xi	yi
15	5
12	7
10	9
7	11

1. Compute the estimated slope (b₁).

2. Compute the estimated intercept (b₀).

3. Write the estimated regression question you have calculated.

2. A company has recorded data on the weekly sales for its product (y) and the unit price of the competitors product (x). Shown below is a portion of an Excel output for regression analysis.

Summary Output
Regression Statistics
Multiple R	0.878
R Square	0.770
Adjusted R Square	0.725
Standard Error	1.644
Observations	7
ANOVA
	df	SS	MS	F	Significance F
Regression	1	45.347	45.347	16.783	0.190
Residual	5	13.509	2.701
Total	6	58.857
	Coefficients	Standard Error	t Stat	P-value
Intercept	3.58	3.6082	0.992	0.366
Price	41.60	10.1552	4.096	0.190

1. Write the estimated regression equation from the Excel Output. Using that equation, if the competitors price is $0.30, what are the predicted weekly sales?

2. Conduct the significance test for the relationship between Sales and Competitors Price using the t-test (or F-test). Include null and alternative hypotheses, comparison to alpha of 5%, decision and conclusions.