Exhibit 12-10
the Following Information Regarding a Dependent Variable Y

question 113

Essay

Exhibit 12-10
The following information regarding a dependent variable Y and an independent variable X is provided.
$$\begin{array} { l } \mathrm { n } = 4 \\\Sigma \mathrm { X } = 16 \\\Sigma \mathrm { Y } = 28 \\\Sigma \mathrm { Y } - { \bar { Y )} } \mathrm { X } - \bar { X } ) = - 8 \\\Sigma \mathrm { X } - \bar { X } ) ^ { 2 } = 8 \\\mathrm { SST } = 42 \\\mathrm { SSE } = 34\end{array}$$
-Assume you have noted the following prices for paperback books and the number of pages that each book contains.
$$\begin{array} { c c c } \text { Book } &\text { Pages} \mathbf{x} \text { ) } &\text { Price } \mathbf{y)} \\\text { A } & 500 &\$ 7.00 \\\mathrm {~B} & 700 & 7.50 \\\mathrm { C } & 750 & 9.00 \\\mathrm { D } & 590 & 6.50 \\\mathrm { E } & 540 & 7.50 \\\mathrm {~F} & 650 & 7.00 \\\mathrm { G } & 480 & 4.50\end{array}$$
a. Develop a least-squares estimated regression line.
b. Compute the coefficient of determination and explain its meaning.
c. Compute the correlation coefficient between the price and the number of pages. Test to see if x and y are related. Use ? = 0.10.

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Definitions:

Gross Investment

The total amount spent on new capital assets before accounting for depreciation, reflecting an economy's investment levels.

Plant And Equipment

Physical assets of a business that are permanent structures or fixed machinery used in operations.

Inventory

The total amount of goods and materials held in stock by a business, intended for sale or production.

Partnerships

A business organization in which two or more individuals own and operate the business together, sharing in profits and liabilities.