An Economist Wanted to Analyse the Relationship Between the Speed

question 110

Essay

An economist wanted to analyse the relationship between the speed of a car (x) in kilometres per hour (kmph) and its fuel consumption (y) in kilometres per litre (kmpl). In an experiment, a car was operated at several different speeds and for each speed the fuel consumption was measured. The data obtained are shown below. $$\begin{array} { | l | l | l | l | l | l | l | l | } \hline \text { Speed (mph) } & 25 & 35 & 45 & 50 & 60 & 65 & 70 \\\hline \begin{array} { l } \text { Fuel consumtion } \\\text { (mpg) }\end{array} & 40 & 39 & 37 & 33 & 30 & 27 & 25 \\\hline\end{array}$$ a. Find the least squares regression line.
b. Calculate the standard error of estimate, and describe what this statistic tells you about the regression line.
c. Do these data provide sufficient evidence at the 5% significance level to infer that a linear relationship exists between higher speeds and lower fuel consumption?
d. Predict with 99% confidence the fuel consumption of a car traveling at 55 kmph.

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Definitions:

Assigned Right

A right that has been transferred from one party (the assignor) to another (the assignee), typically involving rights to receive payments or benefits.

Holder In Due Course

A person who has acquired a negotiable instrument in a legitimate manner and has rights to enforce it free of certain defenses.

Personal Defense

A legal argument or strategy used by an individual to justify actions taken or to protect oneself from criminal or civil liability.

Failure Of Consideration

occurs when the promised performance in a contract is not delivered, rendering the contract voidable or void.