A Local Tire Dealer Wants to Predict the Number of Tires

question 99

Essay

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 monthly tire sales (in thousands of tires)and monthly advertising expenditures (in thousands of dollars).The simple linear regression equation is ŷ = 3 + 1x,and the sample correlation coefficient (r²)= .6364.Test to determine if there is a significant correlation between the monthly tire sales and monthly advertising expenditures.Use H₀: ρ = 0 vs.H_A: ρ ≠ 0 at α = .05.

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Definitions:

Regression

A statistical method that models the relationship between a dependent variable and one or more independent variables, predicting the former based on the latter.

Analysis of Variance

A statistical method used to test differences between two or more means by analyzing variance.

Independent Samples T-Test

A statistical test used to compare the means of two independent groups in order to determine if there is a statistically significant difference between them.

Dependent Samples T-Test

A statistical test used to compare the means of two related groups.