Enment 2 The Toyota Camry is one of the best-selling cars in North America. The cost of a previously owned Camry depends on many factors, including the model year, mileage, and condition. To investigate the relationship between the car's mileage and the sales price for Camrys, the following data show the mileage and sale price for 19 sales (PriceHub web site, February 24, 2012). DATA file Miles (1,000s) 22 Price ($1,000s) 16.2 16.0 29 36 13.8 47 63 11.5 12.5 12.9 11.2 77 73 87 13.0 11.8 92 10.8 101 110 28 59 8.3 12.5 11.1 15.0 12.2 68 68 13.0 91 42 15.6 65 12.7 110 8.3 (a) Choose a scatter chart below with 'Miles (1000s)' as the independent variable. (a) Choose a scatter chart below with 'Miles (1000s) as the independent variable. (1) 18+ 16 14 12 10 Price ($1000s) 8 6 4- N 0 20 40 80 100 120 60 Miles (1000s) (ii) 18 16 14 12 101 Miles (1000s 8 6 O NA 2. 100 54F Clear SE MINDTAP ssignment 2 (iii) 100 80 Price $1000 60+ 40- 20 0 14 6 16 12 4 2 18 0 8 10 biles (1000s) (iv) 100 80 Miles (1000s 60- 40 20 18 16 14 0- 0 6 4 2 8 Price 10 12 ($1000s) 54F Clear 20+ 0- 0 N + 2 4 6 8 14 10 12 ($1000s 16 18 Price - Select your answer What does the scatter chart indicate about the relationship between price and miles? The scatter chart indicates there may be a Select your answer linear relationship between miles and price. Since a Camry with higher miles will generally sell for a lower price, a Select your answer relationship is expected between these two variables. This scatter chart Select your answer - consistent with what is expected. w (b) Develop an estimated regression equation showing how price is related to miles. What is the estimated regression model? Let x represent the miles. If required, round your answers to four decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300) (c) Test whether each of the regression parameters Bo and B1 is equal to zero at a 0.01 level of significance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable? (1) We can conclude that both Bo and B1 are equal to zero, where Bo is the estimated change in price in thousands of dollars for a increase of 1,000 miles and Br is the estimated price in thousands of dollars when the number of miles is zero. The interpretation of Bo is not reasonable but the interpretation of B1 is reasonable. (ii) We cannot conclude that neither Bo nor B1 are equal to zero, where Bo is the estimated price in thousands of dollars when the number of miles is zero and B1 is the estimated change in price in thousands of dollars for a increase of 1,000 miles. The interpretation of Bo is reasonable but the interpretation of B1 is not reasonable. (iii) We can conclude that neither Bonor B1 are equal to zero, where Bo is the estimated price in thousands of dollars when the number of miles is zero and B1 is the estimated change in price in thousands of dollars for a increase of 1,000 miles. The interpretation of Bo is not reasonable but the interpretation of B1 is reasonable. (iv) We can conclude that Bo = 0 but - #0, where Bo is the estimated change in price in thousands of dollars for a increase of 1,000 miles and B1 is the estimated price in thousands of dollars when the number of miles is zero. Both interpretations are reasonable. - Select your answer When the number of miles is zero and B1 is the estimated change in price in thousands of dollars Hot reasonable but the interpretation of Br is reasonable. (iv) We can conclude that Bo= 0 but B1 * 0, where Bo is the estimated change in price in thousands of dollars for a increase of 1,000 miles and B1 is the estimated price in thousands of dollars when the number of miles is zero. Both interpretations are reasonable. Select your answer (d) How much of the variation in the sample values of price does the model estimated in part (b) explain? if required, round your answer to two decimal places. % (e) For the model estimated in part (b), calculate the predicted price and residual for each automobile in the data. Identify the two automobiles that were the biggest bargains. If required, round your answer to the nearest whole number. The best bargain is the Camry # in the data set, which has miles, and sells for $ less than its predicted price. The second best bargain is the Camry # in the data set, which has miles, and sells for $ less than its predicted price. (f) Suppose that you are considering purchasing a previously owned Camry that has been driven 60,000 miles. Use the estimated regression equation developed in part (b) to predict the price for this car. If required, round your answer to one decimal place. Do not round intermediate calculations. Enter your answer in dollars. For example, 12 thousand should be entered as 12,000. Predicted price: $ Is this the price you would offer the seller? Explain. (i) Regardless of other factors not considered in the model (various options, the physical condition of the body and interior, etc.), this is not a reasonable price to expect to pay for a Camry that has been driven 60,000 miles miles. (ii) Depending on other factors not considered in the model (various options, the physical condition of the body and interior, etc.), this is a reasonable price to expect to pay for a Camry that has been driven 60,000 miles miles. - Select your answer C D ENG 54F Clear