A Local Tire Dealer Wants to Predict the Number of Tires

question 12

Short Answer

A local tire dealer wants to predict the number of tires sold each month. He believes that the number of tires sold is a linear function of the amount of money invested in advertising. He randomly selects 6 months of data consisting of tire sales (in thousands of tires) and advertising expenditures (in thousands of dollars). Based on the data set with 6 observations, the simple linear regression model yielded the following results.
∑X = 24
∑X² = 124
∑Y = 42
∑Y² = 338
∑XY = 196
Determine the values of SSE and SST.

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Definitions:

Incorrect Decision

A decision that does not result in the optimal or expected outcome, often due to faulty reasoning or misinformation.

Type I Error

The incorrect rejection of a true null hypothesis in hypothesis testing, also known as a false positive.

Type II Error

The error made by failing to reject a false null hypothesis, also known as a false negative.

Increasing

A term indicating that something is growing or becoming larger in size, number, value, or quality.