11.6 The Organization of Petroleum Exporting Countries (OPEC), a cartel of crude-oil suppliers, controls the crude oil prices and production. Do they affect the gasoline prices paid by motorists?

Table on the next page gives the average annual prices of crude oil and unleaded gasoline in the United States (U.S. Census Bureau, Statistical Abstracts of the United States, 2009). The price of crude oil is in dollars per barrel (a refiner acquisition cost) and the price of unleaded gasoline is in dollars per gallon (paid by motorists at the pump) for the years 1976–2007.

a Use these data to calculate the least-squares line that describes the relationship between the price of a gallon of gas and the price of a barrel of crude oil.

b Plot your least-squares line on a scatterplot of the data. Does your least-squares line appear to be an appropriate characterization of the relationship between y and x ? Explain.

c If the price of crude oil fell to $20 per barrel, to what level (approximately) would the price of regular gasoline fall? Justify your response.

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Crude Unleaded Crude Unleaded Year Oil Gasoline Year Oil Gasoline 1976 10.89 0.61 1991 19.06 1.14 1977 11.96 0.66 1992 18.43 1.13 1978 12.46 0.67 1993 16.41 1.11 1979 17.72 0.90 1994 15.59 1.11 1980 28.07 1.25 1995 17.23 1.15 1981 35.24 1.38 1996 20.71 1.23 1982 31.87 1.30 1997 19.04 1.23 1983 28.99 1.24 1998 12.52 1.06 1984 28.63 1.21 1999 17.51 1.17 1985 26.75 1.20 2000 28.26 1.51 1986 14.55 0.93 2001 22.95 1.46 1987 17.90 0.95 2002 24.10 1.36 1988 14.67 0.95 2003 28.53 1.59 1989 17.97 1.02 2004 36.98 1.88 1990 22.22 1.16