Listed Below Is a Company's Sales in the Period 2000

question 61

Essay

Listed below is a company's sales in the period 2000 to 2011 along with the national income of the country, where the
business is set up. $$\begin{array} { | c | c | c | } \hline \text { Year } & \begin{array} { c } \text { National Income (in } \\\text { millions of dollars) } \boldsymbol { x }\end{array} & \begin{array} { c } \text { Company's sales (in } \\\text { thousands of dollars) } \boldsymbol { y }\end{array} \\\hline 2000 & 305 & 470 \\\hline 2001 & 316 & 485 \\\hline 2002 & 358 & 499 \\\hline 2003 & 350 & 515 \\\hline 2004 & 375 & 532 \\\hline 2005 & 392 & 532 \\\hline 2006 & 400 & 556 \\\hline 2007 & 398 & 576 \\\hline 2008 & 430 & 583 \\\hline 2009 & 456 & 587 \\\hline 2010 & 578 & 601 \\\hline 2011 & 498 & 605 \\\hline\end{array}$$
a. Develop a scatter chart for the above data. What does this chart indicate about the relationship between the
National Income and the Company's sales in the period 2000 to 2011?
b. Use the data to develop an estimated regression equation that could be used to estimate the company's sales
based on the national income. What is the estimated regression model?

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Definitions:

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a person's mind when evaluating a specific topic, concept, method, or decision.

Remembered

Pertains to information or experiences that have been stored in memory and can be retrieved.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobes, involved in complex behaviors such as decision making, planning, and moderating social behavior.

Overconfidence

An overly positive judgment of one’s own decision-making abilities and performance.